JULY 23 2022 ISSUE 2443 www.ifre.com
Collateral damage: borrowers face massive
margin calls on swap hedges as rates rise
Goldman leads US$1bn capital-committed
stock sale as Carnival fights to stay afloat
Political turmoil hits Italy at worst possible
time: will the ECB’s TPI save the day?
STRUCTURED FINANCE EQUITIES EMERGING MARKETS PEOPLE & MARKETS
What a carve up: US$46bn of deals Ukraine mobilises Banks are still
CLO managers look see China’s IPO crucial support adding staff
to split warehouses market lead the for vital debt even as issuance
into two world standstill tanks
04 06 08 10
Potholes on the
road to sustainable
infrastructure
According to Infrastructure 360 data, a record
US$627 billion in sustainable infrastructure
projects in the renewable energy and nuclear
sectors were announced globally in 2021,
up from $275 billion in 2020.
However, despite steady growth in investment, many projects have been
side-lined by a crippling combination of pandemic-related project delays,
supply chain issues, geopolitical tensions, and inflationary pressures.
Of the 1,232 solar and wind projects announced in 2020, just 47 (3.8%)
have been completed.
Discover the insights in Refinitiv’s latest report:
Refinitiv.com/road-to-sustainable-infrastructure
An LSEG Business
Upfront OPINION INTERNATIONAL FINANCING REVIEW
Pain trade !TûTHEûTIME ûEQUITYûWASûNEEDEDûTOûKEEPûOPERATIONSûAmOAT û
But investors had since begun to think that dilutive stock
R isk, like energy, cannot be destroyed; it can merely be sales were a thing of the past, especially as the company sold
changed into a different form. Aû53 BNûBONDûISSUEûINû-AYûnûATûAûPUNCHYû ûCOUPONûnûTOû
That is the lesson currently being learnt by the legions of COVERûNEXTûYEAR SûDEBTûMATURITIES
CORPORATE ûlNANCIALûANDûPUBLIC
SECTORûDEBTûISSUERSûTHATûUSEû
derivatives to manage their sensitivity to moves in interest It turns out that was too optimistic.
rates and currencies. Many of these institutions will have The economic outlook is unclear but bleak for consumer
FACEDûEYE
WATERINGûMARGINûCALLSûONûTHEIRûSWAPSûPOSITIONSû names, as rate hikes bite.
this year as rates have leapt higher. And the cost to access debt markets is climbing fast, with
THEûYIELDûONû#ARNIVAL SûLATESTûBONDûISSUEûNOWû
&ORûISSUERSûTHATûSWAPPEDûCASHmOWSûONûTHEIRûlXED
RATEû #ARNIVAL SûDEALûISûONLYûTHEûFOURTHû53 BNûEQUITYû
BONDSûTOûmOATINGûRATESûLASTûYEARûnûAûCOMMONûTACTICûAMONGû FUNDRAISINGûINûTHEû53ûSOûFARûTHISûYEAR û4HEûGROWINGûSIGNSûOFû
DEBTûISSUERSûnûTHEûROUGHLYû BPûINCREASEûINû
YEARû53û economic slowdown mean more will have to follow.
swap rates to their peak in June would have shifted their
DERIVATIVESûPOSITIONûABOUTû ûOUTûOFûTHEûMONEY û4HATûINû Better late than never
TURNûMEANSûTHEYûWOULDûHAVEûHADûTOûSTUMPûUPûAROUNDûAûlFTHû
of their original borrowing amount as collateral. Talk about B y the look of it, Australia and New Zealand Banking
a rude awakening. 'ROUPûWASûITCHINGûTOûMAKEûAûMAJORûACQUISITION û)TûJUSTû
wasn’t sure which way to go until the last minute.
After years of very placid rates markets, it’s hard to
OVERSTATEûHOWûDRAMATICûTHESEûMOVESûHAVEûBEEN û4HEû
YEARû /Nû*ULYû û!USTRALIA SûFOURTH
LARGESTûBANKûCONlRMEDû
53ûSWAPûRATEûJUMPEDû BPûOVERûTHEûCOURSEûOFûJUSTûTHREEû market rumours that it was in discussions with KKR about the
and a half months this year. potential purchase of MYOB, an Australian provider of
accounting software. The assumed rationale was that the deal
The swaps position these issuers entered allowed them to WOULDûHELPûITûWINûMOREûSMALLûBUSINESSûCUSTOMERS û"UTûlVEû
manage their interest rate risk, while the collateral DAYSûLATER û!.:ûSAIDûITûWASûBUYINGû3UNCORPû"ANKûTOûEXPANDûITSû
agreement they signed with their swaps dealer mitigated domestic retail franchise and killed the MYOB talks.
their counterparty risk. But in doing so, they hugely
increased their own liquidity risk. The only common feature of the two deals was the price
TAG ûAROUNDû! BNû 53 BN ûFORû-9/"ûANDû! BNûFORû
,ITTLEûWONDERûTHENûTHATûSHORT
TERMûFUNDINGûMARKETSûHAVEû 3UNCORPû"ANK
come under so much pressure as companies have
scrambled to raise money. Volumes in European repo (AVINGûFAILEDûTOûlNDûGROWTHûINûEMERGINGû!SIAûUNDERû
markets surged to record highs, while commercial paper PREVIOUSû#%/û-IKEû3MITHûANDûTOYINGûWITHûTHEûIDEAûOFû
ISSUANCEûINûTHEû53ûROCKETED û4HEûDASHûFORûCASHûHASûBEENû dabbling in software, ANZ now says it has found the perfect
EXTRAORDINARYûnûNOTûHELPEDûBYûTHEûFACTûTHATûPRIMARYûMARKETSû GROWTHûMARKET û!USTRALIA ûORûMOREûSPECIlCALLYûTHEûSTATEûOFû
haven’t been easily accessible for every borrower. 1UEENSLAND ûWHEREû3UNCORPû"ANKûISûBASEDûANDû!.:ûISû
PUNCHINGûBELOWûITSûWEIGHTûnûMOREûSPECIlCALLYûSTILL û
3OMEûFUNDûOFlCIALSûHADûTHEûFORESIGHTûTOûANTICIPATEû Queensland’s mortgage market.
scenarios like this by ensuring they had enough cash on
hand to meet any additional requirements. A decline in 4HEûRATIONALEûISûHARDûTOûFAULTûnû1UEENSLANDûHASûBEENûTHEû
market interest rates in the past few weeks should also help COUNTRY SûFASTEST
GROWINGûSTATEûFORûTWOûDECADESûANDû!.:ûHASûBEENû
others ease some of the strain. LOSINGûMARKETûSHAREûINûHOMEûLOANSûnûBUTûTHEûBELATEDûREALISATION û
ANDûEXECUTION ûCOMEûWITHûSOMEûNON
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3TILL ûWITHûCENTRALûBANKSûHELLBENTûONûRAISINGûINTERESTûRATESû
TOûCOMBATûINmATION ûDON TûEXPECTûTHISûPROBLEMûTOûDISAPPEARû !.:ûISûADDINGû! BNûOFûMORTGAGEûASSETSûJUSTûASûHOUSEû
ANYTIMEûSOON û)NûOTHERûWORDS ûTHEûGREATûMARGINûCALLûOFû û prices are starting to fall and the Reserve Bank of Australia is
WILLûCONTINUEûTOûREVERBERATEûAROUNDûlNANCINGûMARKETSûFORû AGGRESSIVELYûRAISINGûRATESûnûTHREEûTIMESûALREADYûSINCEû-AY û
some time to come. with more to come. Perhaps mindful of competition issues,
THEûBANKûISûALSOûMAKINGûEXPENSIVEûCOMMITMENTS û)TûWON Tû
Safety first MAKEûNETûSTAFFûCUTSûORûCLOSEûANYû3UNCORPûBRANCHESûINû
Queensland for three years after completion, which is slated
C ARNIVAL SûUNEXPECTEDûTACKûINTOû%#-ûFORû53 BNûVIAûAû FORûTHEûSECONDûHALFûOFûNEXTûYEAR û!SûAûRESULT ûITûWILLûTAKEûSIXû
block trade suggests the cruise ship operator is nervous years to fully realise the synergies that will make the
ABOUTûITSûOPERATIONSûINû combination mildly accretive to earnings over time.
Given the events of the past couple of years, Carnival ANZ can take comfort from the market reaction. The
is no stranger to selling shares. It has issued some INSTITUTIONALûTRANCHEûOFûITSûENTITLEMENTûOFFERûWASû û
53 BNûOFûEQUITYûSINCEûTHEûONSETûOFûTHEûPANDEMICûINû subscribed and the share price has risen in response to the
EARLYû deal. But the prospect of a long regulatory review amid
darkening economic skies leaves it no room for error.
International Financing Review July 23 2022 1
Top news
Political turmoil hits Italy 04 CLO managers to split warehouses 04 China IPOs lead the world 06
Borrowers face huge margin calls
on swap positions as rates rise
People & Markets Borrowers tap short-term funding markets to alleviate liquidity squeeze
BY CHRISTOPHER WHITTALL 3UCHûMOVESûHAVEûBEENûAûRARITYû DIFlCULTûASûDERIVATIVESûDEALSûAREû THEûWEEKûENDINGû*UNEû ûWHENû
DURINGûTHEûPASTûDECADEûOFûROCK
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This year’s steep rise in BOTTOMûINTERESTûRATES û"UTûTHEû DEBTûISSUANCEûVOLUMESûFROMû
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IN
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1/1/20 -10 2020 2021 2022* hPOSITIVEûFORûUSvûANDûHELPEDûTHEû
1/1/21
1/1/22 Note: *data through July 19
Source: Federal Reserve Board
2 International Financing Review July 23 2022
@ For daily news stories
visit www.ifre.com
Didi exits purgatory Ukraine wants standstill Banks still adding staff even as issuance tanks
PUBLICûSECTORûBORROWERûINCREASEû Carnival surprises with US$1bn
THEûSIZEûOFûITSûFUNDINGû committed equity raise
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5/9/21
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5/7/22
International Financing Review July 23 2022 3
Top news
Political turmoil hits Italy
at worst possible time
Bonds Italy faces months of volatility ahead of an election but ECB’s TPI may calm choppy waters
BY LUKE ACTON, HELENE DURAND GENERALûRISEûINûINTERESTûRATESûBUTû BP û!NDûWHILEûTHEû
YEARû h)NVESTORSûAREûATTACHINGûANû
ALSOûBECAUSEûTHEûGENERALûRISKû "40ûYIELDûISûBELOWûTHEû ûYEARû EXTRAûRISKûPREMIUMûTOû)TALIANû
(OPESûTHATûTHEû%UROPEANû#ENTRALû AVERSIONûPUSHEDûSPREADSûWIDERû HIGHûITûHITûINûTHEûMIDDLEûOFû*UNE û ASSETSûANDûWILLûREQUIREûSOMEû
"ANKûWOULDûSTEPûINûANDûCALMû ANDûTHEûLATESTûPOLITICALûTURMOILû ATû ûITûISûSOMEû BPûHIGHERû EXTRAûYIELDûUNTILûWEûGETûTHEû
MARKETSûINûTHEûFACEûOFûRENEWEDû ANDûEARLYûELECTIONSûCOMPOUNDEDû THANûWHEREûITûWASûATûTHEûSTARTûOFû ELECTIONûRESULTS ûAûCOALITIONûISû
POLITICS
LEDûVOLATILITYûINûITALY THEûDYNAMICS vûSAIDû(AUKEû THEûYEAR û FORMEDûANDû SûBUDGETûISû
WEREûDASHEDûAFTERûTHEûMONETARYû 3IEMSSEN ûANûINTERESTûRATESû DECIDED vûHEûSAID û(OWEVER ûHEû
AUTHORITYûFAILEDûTOûCOMEûUPûWITHû STRATEGISTûATû#OMMERZBANK ûh7Eû “Clearly the next two THINKSûTHEûRISKSûOFûAûFULL
BLOWNû
AûhWHATEVERûITûTAKESvûMOMENTû REMAINûCAUTIOUSûREGARDINGû months are going to SOVEREIGNûCRISISûAREûAûLOTûLOWERû
DESPITEûANNOUNCINGûAûNEWûBOND
SPREADSûANDûEXPECTûTHEûWIDENINGû be difficult: there is no THANûBEFOREûGIVENûTHEûREFORMSû
BUYINGûSCHEME û TRENDûTOûCONTINUE v incentive for politicians THATûHAVEûBEENûIMPLEMENTEDû
to say prudent things ANDûTHEûSTRONGûSUPPORTûFORûTHEû
4HEûLOOMINGûENDûOFû $RAGHI SûRESIGNATIONûONû as they need to EUROûINûTHEûCOUNTRY û
QUANTITATIVEûEASINGûHADûALREADYû 4HURSDAYûMORNINGûPUSHEDûTHEû maximise their ability
UNDERMINEDû)TALIANûBONDSûWITHû SPREADûBETWEENû)TALYûANDû to collect votes” 3TILL ûINVESTORSûAREûBRACINGû
THEIRûSPREADûAGAINSTû'ERMANû 'ERMANYû
YEARûBONDSûTOû THEMSELVESûFORûFURTHERûVOLATILITY û
"UNDSûDRIFTINGûWIDERûSINCEûTHEû BP ûANDûTHATûGAPûREMAINEDûINû *ULIENû3EETHARAMDOO ûHEADûOFû h#LEARLYûTHEûNEXTûTWOûMONTHSû
STARTûOFûTHEûYEAR û(OWEVER ûTHEû THEûIMMEDIATEûAFTERMATHûOFûTHEû %UROPEANûMARKETûSTRATEGYûATû AREûGOINGûTOûBEûDIFlCULT û;THEREûIS=û
SELF
INmICTEDûWOUNDûOFûTHEû %#" SûDECISIONûAûFEWûHOURSûLATERû :URICHû)NSURANCE ûBELIEVESûTHEû NOûINCENTIVEûFORûPOLITICIANSûTOû
RESIGNATIONûOFûPRIMEûMINISTERû TOûRAISEûRATESûFORûTHEûlRSTûTIMEûINû SPREADûBETWEENû)TALYûANDû SAYûPRUDENTûTHINGSûASûTHEYûNEEDû
-ARIOû$RAGHIûnûANDûAûLIKELYû MOREûTHANûDECADEûnûANDûBYû BPû 'ERMANYûCOULDûSTAYûINûTHEû Sû TOûMAXIMISEûTHEIRûABILITYûTOû
ELECTIONûINûTHEûAUTUMNûnûADDEDû RATHERûTHANûTHEû BPûITûHADû UNTILûTHEREûISûCLARITYûONûAûNEWû COLLECTûVOTES vûSAIDû"RUNOû2OVELLI û
EVENûMOREûFRAGILITYûLASTûWEEK ORIGINALLYûGUIDED GOVERNMENT CHIEFûINVESTMENTûSTRATEGISTûFORû
)TALYûATû"LACK2OCK ûh4HEûMARKETû
h#LEARLY û)TALY SûFUNDINGûCOSTSû )TALY SûBONDSûDIDûRALLYûONû MIGHTûDISLIKEûWHATûTHEYûHEAR û
HAVEûGONEûUPûSINCEûTHEûSTARTûOFû &RIDAYûBUTûTHEûPICK
UPûOVERû $OESûITûMEANûTHATûTHEYûWILLûDOû
THEûYEAR ûNOTûONLYûBECAUSEûOFûTHEû "UNDSûSTILLûREMAINSûELEVATEDûnûATû
What a carve up: CLO managers look
to split warehouses into two
Structured Finance If legal obstacles are overcome, splitting warehouses promises to get the market moving again
BY RICHARD METCALF RATEDû#,/ûBONDSûREACHINGû BPû LOANSûINûTHEûWAREHOUSEûDOWNû PREVAILINGûMARKETûCONDITIONSû
OVERû%URIBOR ûUPûFROMû BPûINû ANDûSEEKINGûTOûROUNDûOUTûTHEû ANDûTERMEDûOUTûINûAûVIABLEû#,/
#,/ûMANAGERSûSITTINGûONû -AY BALANCEûOFûTHEûPORTFOLIOûWITHû
SUBSTANTIALûPILESûOFûLOANSû LOANSûTHATûCANûBEûSOURCEDûINûTHEû -OREOVER ûBECAUSEûEACHûNEWû
ACQUIREDûATûORûCLOSEûTOûPARûBEFOREû &ORûMANAGERSûWHOSEû#,/û MARKETûATûSIGNIlCANTûDISCOUNTSû WAREHOUSEûCOMESûWITHûAûNEWû
THISûYEAR SûDRAMATICûCREDITûSLUMPû WAREHOUSESûWEREûALREADYû TOûPAR ûORûWITHûNEWûLOANSûPRICEDû REVOLVINGûPERIOD ûITûBUYSûTHEû
AREûWORKINGûONûAûNEWûSTRATEGYûnû RAMPEDûINû&EBRUARY ûTHISûMAKESû ATûHIGHERûMARGINS ûTOûHELPûTHEMû MANAGERûANOTHERûYEARûORûMOREû
SPLITTINGûUPûTHEIRûWAREHOUSESûTOû THEûECONOMICSûOFûTERMINGûOUTû MEETûTHEIRûINTERESTûONûTHEû TOûDEALûWITHûTHEûASSETSûTHATûAREû
DILUTEûTHEûPROPORTIONûOFûHIGH
THEûWHOLEûPORTFOLIOûEXTREMELYû NOTES v TRANSFERREDûINTOûIT
PRICEDûASSETSûTOûHELPûMAKEûNEWû UNAPPEALING ûPROMPTINGûAû
ISSUESûWORK SEARCHûFORûNEWûIDEASûFORûHOWûTOû )NûORDERûTOûSPLITûAûWAREHOUSE û h)T SûAûSOLUTIONûTOûPOSSIBLYûGETû
DEALûWITHûTHEûASSETS THEûMANAGERûCREATESûONEûORûTWOû AûDEALûDONEûINûAûSCENARIOûWHERE û
,OANûPRICESûHAVEûTUMBLEDû NEWûWAREHOUSEûVEHICLESûWITHû ABSENTûDOINGûTHAT ûYOU REûNOTû
SINCEûTHEû2USSIANûINVASIONûOFû h4HEûTWOûSOLUTIONSûTHATûMOSTû THEûSAMEûARRANGERûANDûEQUITYû GOINGûTOûGETûAûDEALûDONE vûSAIDûAû
5KRAINEûATûTHEûENDûOFû&EBRUARY û ARRANGERSûANDûMANAGERSûCANûGOû PROVIDERûASûTHEûlRSTûONEûANDû #,/ûMANAGER
WHICHûADDEDûAûPOTENTIALû FORûISûTHEYûEITHERûTRYûTOûSPLITûTHEû TRANSFERSûAûPORTIONûOFûTHEû
%UROPEANûENERGYûCRISISûTOû WAREHOUSEûORûTHEYûTAKEûAûLOOKûATû EXISTINGûLOANûPORTFOLIOûINTOûTHOSEû 3PLITTINGûWAREHOUSESûINûHALFû
INVESTORS ûEXISTINGûCONCERNSû UPSIZINGûTHEûDEAL vûSAIDû,AILAû ENTITIES ALSOûIMPLIESûAûDOUBLINGûOFûTHEû
AROUNDûINmATIONûANDûRISINGûRATES û +OLLMORGEN ûAûPORTFOLIOûMANAGERû OVERALLûNUMBERûOFû#,/S ûINû
!TûTHEûSAMEûTIME ûTHEûSPREADSû ATû0INE"RIDGEû)NVESTMENTSûINû 4HISûREDUCESûTHEûBURDENûOFûTHEû THEORYûMEANINGûMOREûFEESûFORû
DEMANDEDûBYûINVESTORSûFORû#,/û (OUSTONûWHOûBUYSû53ûANDû EXPENSIVEûLOANSûONûTHEûORIGINALû MANAGERS ûTHOUGHûTHEYûAREû
BONDSûHAVEûSPIRALLEDûEVERûWIDER û %UROPEANû#,/ûBONDS WAREHOUSE ûWHICHûCANûTHENûBEû UNLIKELYûTOûREAPûASûMUCHûREWARDû
WITHûPRICINGûONûRECENTû4RIPLEû!û lLLEDûUPûWITHûASSETSûACQUIREDûATû FROMûEACHûTRANSACTIONûASûTHEYû
h4HEY REûTRYINGûTOûGETûTHATû PRICESûMOREûINûLINEûWITHû WOULDûWITHûMOREû
PERCENTAGEûOFûHIGHERûPRICEDû STRAIGHTFORWARDûDEALS
4 International Financing Review July 23 2022
@ For daily news stories
visit www.ifre.com
EVERYTHINGûTHATûTHEYûSAYûINûTHEû SECONDARYûMARKETûPURCHASESûOFû #HRISTINEû,AGARDEûWASûKEENû LINE ûTHEREûAREûSTILLûTOOûMANYû
NEXTûTWOûMONTHS û)ûSTRONGLYû SECURITIESûISSUEDûINû TOûEMPHASISEûTHATûTHEûCENTRALû QUESTIONSûASûTOûHOWûITûWILLûBEû
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ANTEûLIMITSv û4HEû40)ûISûINû SUSTAINABILITY
INVESTMENTûOFlCERûOFû"LUE"AYû COUNTRY
SPECIlCûFUNDAMENTALSv û ADDITIONûTOûTHEû%#" Sû0%00û "UTûATûLEASTûMARKETûPARTICIPANTSû
!SSETû-ANAGEMENT ûTHEûPOLITICALû 0URCHASESûWOULDûBEûFOCUSEDûONû REINVESTMENTûmEXIBILITYûANDûTHEû AREûSANGUINEûABOUTû)TALY SûDEBTû
LANDSCAPEûISûAûREASONûTOûBEû PUBLICûSECTORûSECURITIESûWITHûAû /-4 û SUSTAINABILITY û
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h4HISû;ELECTION=ûCOMPLICATESû )TALY ûITûISûCLEARûFORûWHICHû DEBTûBUTûWEûAREûSTILLûQUITEûFARû
THEûFORMATIONûOFûAûBUDGET ûTHEû “Italy has very high JURISDICTIONûTHEû40)ûHASûBEENû AWAYûFROMûCONCERNSûABOUTûDEBTû
RELEASEûOFû%UROPEANûRECOVERYû levels of debt but we CREATED û"UTûINVESTORSûWEREûLEFTû SUSTAINABILITY vûSAIDû:URICH Sû
FUNDS ûANDûUNITYûINûDEALINGûWITHû are still quite far away DISAPPOINTED 3EETHARAMDOO ûh9OUûHAVEûTOû
THEûENERGYûCRISISûGRIPPINGû from concerns about LOOKûATûTHEûCOSTûOFûDEBTûRELATIVEû
%UROPE vûHEûSAID ûh4HEû debt sustainability” h)TûISûAûVERYûWOOLLYûSTATEMENT û TOûNOMINALûGROWTHûAND ûRIGHTû
ARCHITECTUREûOFûTHEû)TALIANû AûVERYûWOOLLYûSETûOFûCONDITIONS vû NOW ûYIELDSûAREûWELLûBELOWû
ELECTORALûSYSTEM ûINûFACTûTHEû 4HEûSCALEûOFû40)ûPURCHASESû SAIDû.ICKû#HATTERS ûINVESTMENTû WHEREûNOMINALû'$0ûGROWTHûIS v
ENTIREû)TALIANûPOLITICALû WOULDûDEPENDûONûTHEûSEVERITYûOFû MANAGERûINû!EGON SûGLOBALûRATESû
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FORûPURPOSEûANDûDOESûNOTûINVITEû TRANSMISSIONûANDûBEûBASEDûONû STRAIGHTûAWAY û)ûTHINKûINûPRACTICEû WHILEûINûTHEûSHORTûTERMûTHEREû
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GOVERNMENT v ABSENCEûOFûSEVEREû CONVOLUTED û)ûTHINKûIT SûPRETTYû NEGATIVEûONûTHEûPOLITICSûORûTHEû
MACROECONOMICûIMBALANCES û POOR û)FûWEûHADûAû$RAGHI
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4HEû%#"ûHOPEDûTOûSOOTHEû ANDûSUSTAINABLEûMACROECONOMICû OF û@RIGHT ûWE LLûBUYûBONDSûANDû
INVESTORS ûCONCERNSûWITHûTHEû POLICIES û%#"ûPRESIDENTû WE LLûDOûWHATEVERûITûTAKESûANDû h)NûTERMSûOFûACCESSûTOûCAPITALû
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MANAGEDûTOûGETûTHEû40)ûOVERûTHEû HEûSAID û
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YOU REûEARNINGûõ MûONûONE û)û MANAGERSûHEAVILYûRAMPEDûAREû JUSTIFYûTHEûACQUISITIONûOFûLOANSû
DON TûTHINKûYOU REûEARNINGû LOOKINGûATûTHISûOPTIONv ATûABOVEûMARKETûRATES !SSUMINGû#,/ûMANAGERSû
õ MûONûTWO û)T SûPROBABLYû CANûREACHûACCEPTABLEûTERMSû
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3PLITTINGûUPû#,/ûWAREHOUSESûHASû ACCEPTEDûASûTHEûCOSTûOFû PROVIDERS ûTHEYûSHOULDûlNDû
“It’s not as if we are in NOTûBEENûDONEûBEFORE ûATûLEASTû COMPLETINGûAû#,/ûTRANSACTIONû PLENTYûOFûPENT
UPûDEMANDû
a banner year such as SINCEûTHEûlNANCIALûCRISIS ûSOûITû ANDûAVOIDINGûAûWIND
UPûOFûTHEû FORûAPPROPRIATELYûPRICEDû
2021 was for primary RAISESûSEVERALûNOVELûSTRUCTURINGû ORIGINALûWAREHOUSE SENIORûNOTESûINûTHEûMARKET û
issuance, so you also ANDûLEGALûQUESTIONS ûTHOUGHû DESPITEûINVESTORûCAUTION û
have to see it from that THESEûAREûALLûSURMOUNTABLE û 4HEREûAREûALSOûLEGALûISSUESû ACCORDINGûTOû0INE"RIDGE Sû
perspective. The market ACCORDINGûTOû-ARKû$RURY ûAû AROUNDûRISKûRETENTIONûANDû +OLLMORGEN
has the capacity to PARTNERûATû,INKLATERSûINû,ONDON û ENSURINGûTHATûTHEûORIGINATORûOFû
take a look at splitting WHOûISûWORKINGûONûATûLEASTûONEû THEûDEALûISûSTILLûLEGALLYû h)T SûNOTûASûIFûWEûAREûINûAû
warehouses” SUCHûOPERATION RECOGNISEDûASûSUCHûFORûTHEûNEWû BANNERûYEARûSUCHûASû ûWASû
WAREHOUSESûTHATûHAVEûACQUIREDû FORûPRIMARYûISSUANCE ûSOûYOUûALSOû
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%UROPEANûWAREHOUSESûOPENûINû BEûSOLDûTOûTHEûNEWûENTITYûATûTHEû PERSPECTIVE vûSHEûSAID ûh4HEû
-AY ûOFûWHICHûASûMANYûASû û PRICEûPAIDûBYûTHEûORIGINALû h)ûSUSPECTûWE REûINûAûPERIODûOFû MARKETûHASûTHEûCAPACITYûTOûTAKEû
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5KRAINE ûACCORDINGûTOûAû#,/û SELLûTHEûLOANSûTOûTHEûNEWûVEHICLEû GETûTRANSACTIONSûAWAYûANDûWILLû 4HEûONLYûQUESTIONûTHENûWILLû
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WAREHOUSESûAREûSUCHûTHATûTHEYû PORTFOLIO
International Financing Review July 23 2022 5
Top news
China’s IPO market leads the world
Equities Retail investors flock to new listings despite challenging market conditions
BY KAREN TIAN, FIONA LAU HALFûOFûTOTALûFUNDSûRAISEDûGLOBALLYû #3) û)NDEX ûWHICHûTRACKSûBLUE
INû)0/SûORûISSUERS ûWILLINGNESSûTOû
INûTHEûlRSTûHALFûOFûTHEûYEAR vûSAIDû CHIPûCOMPANIESûONûTHEû3HANGHAIû TAPûTHEûEQUITYûMARKETS û
4HEû3HANGHAIûANDû3HENZHENûSTOCKû 'EOFFREYû7ANG û#HINAû.ORTHû ANDû3HENZHENûSTOCKûEXCHANGES û
EXCHANGESûWEREûTHEûWORLD SûTOPû)0/û ASSURANCEûLEADERûATû0W# ûh0OLICIESû FALLINGûBYû ûINûTHEûlRSTûHALF "OTHûTHEû3HANGHAIû3TARûMARKETû
MARKETSûINûTHEûlRSTûHALFûOFûTHEûYEAR û ENCOURAGINGûTHEûRETURNûOFûREDû ANDûTHEû3HENZHENû#HI.EXTûBOARDû
DESPITEûTHEû#OVID
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THATûHAVEûHINDEREDû#HINA Sû REGISTRATIONûSYSTEMûWILLûBOTHû THANûOTHERûMARKETSûBYûFACTORSû BOARDSûOFûTHEûTWOûCITIESûINûTHEû
ECONOMICûGROWTHûANDûNEGATIVEû BENElTûTHEû!
SHAREûMARKET v SUCHûASûTHEûWARûINû5KRAINE û lRSTûHALFû SEEûTABLE û4HEûBOARDS û
HEADLINESûONûTHEûREALûESTATEûSECTOR SURGINGûINmATIONûANDûRISINGû WHICHûTARGETûTECHNOLOGYûANDû
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THEû3HENZHENû3TOCKû%XCHANGEû IPO companies Funds raised (Rmb/bn)
RANKEDûSECONDûWITHû2MB BN IPO companies Funds raised (Rmb/bn)
54 74.1
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245 210.9
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Beijing Stock Exchange 19 2.8
Total 169 311.9
Source: PwC
Yes Bank turns the page after rescue
Equities Foreign capital will be key to sell bad loans and raise capital
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6 International Financing Review July 23 2022
@ For daily news stories
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International Financing Review July 23 2022 7
Top news
Ukraine mobilises crucial support
for debt standstill
Emerging Markets Sovereign secures stakeholder buy-in before consent launch while Naftogaz meets resistance
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International Financing Review July 23 2022 9
Top news
Banks in EMEA brace for lev loan pain
Loans European lenders expected to report hit from hung deals, as results season arrives
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Banks still adding staff even as issuance tanks
People & Markets Goldman Sachs to resume its annual cull, but for now it’s still hiring along with rivals
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10 International Financing Review July 23 2022
@ For daily news stories
visit www.ifre.com
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lRMûINETUM ûUNDERWRITTENûBYû THEûBUSINESSûISûPERFORMING ûANDû SECONDûQUARTER ûWRITINGûDOWNû CLEAR vûSAIDû7ELLSû#%/û#HARLESû
#REDITû3UISSEûANDû".00 û"ANKSû THATûTHEREûWASûNOûNEEDûTOûSELLûATû SOMEû53 BNûINûLOSSES 3CHARF ûh7E LLûSEEûHOWûTHATûGOESû
AREûALSOûSTILLûSITTINGûONûAûTERMû AûDISTRESSEDûPRICE vûSAIDûAûSOURCEû OVERûTHEûCOMINGûMONTHS v
LOANû"ûOFûUPûTOûõ MûBACKINGû FAMILIARûWITHûTHEûSITUATION 4HEûEARLYûLOSSESûWEREû
THEûMERGERûBETWEENû3PANISHû CONSERVATIVEûANDûBARELYûDENTEDû “Some of those deals
CALL
CENTREûCOMPANYûKONECTA "ANKSûTHATûAREûOPTINGûTOûHOLDû THEûFORTRESSûBALANCEûSHEETSûOFû have been funded,
ANDûITSû)TALIANûPEERûCOMDATA û ONTOûDEALSûOFTENûHAVEûLARGERû JP MORGAN ûBANK OF AMERICA û and we’re working
UNDERWRITTENûBYû*0û-ORGAN û BALANCEûSHEETS ûANDûSOûAREûMOREû GOLDMAN SACHS ûMORGAN STANLEY through any remaining
#REDITû!GRICOLE û".00ûANDû ABLEûTOûHOLDûONTOûRISKûANDû ANDûWELLS FARGO nûATûLEASTûINûTHISû exposure to get them
$EUTSCHE WEATHERûTHEûSTORM ûSAIDû lRSTûROUNDûOFûMARK
TO
MARKETû through the market”
BANKERS û"UTûEVENûBANKSûWITHû WRITEDOWNS
NOT ON THE SAME PAGE LARGEûBALANCEûSHEETSûWILLûBEû 7ELLSûTOOKûAûWRITEDOWNûOFû
4HEûSITUATIONûISûMADEûMOREû CONSTRAINEDûINûNEWûLENDINGû 'OLDMANûCHIEFûEXECUTIVEû ABOUTû53 MûANDûNOTEDûTHATû
COMPLICATEDûBYûTHEûFACTûTHATûNOTû WHILEûSITTINGûONûSTUCKûDEALS $AVIDû3OLOMONûISûEXPECTINGûTHATû ALLûTHESEûDEALSûAREûSUBJECTûTOû
EVERYûDESKûISûONûTHEûSAMEûPAGEû WHENûBUYERSûANDûSELLERSûADJUSTû FURTHERûSPREADûWIDENING ûGIVENû
WHENûITûCOMESûTOûSELLING h4HEREûCOULDûBEûTWOûREASONSû TOûNEWûPRICINGûREALITIES ûMARKETSû THEûCURRENTûENVIRONMENT
TOûSELLûnûONEûISûTOûMAKEûROOMûTOû WILLûOPEN ûOLDûDEALSûWILLûCLEARû
h4HERE SûALWAYSûANûISSUEû UNDERWRITEûNEWûDEALS û4HEû ANDûNEWûONESûWILLûCOMEûTOû "OF!ûTOOKûSOMEû53 MûINû
AROUNDûTHATûINûTIMESûLIKEûTHIS vû OTHERûISûTHATûPEOPLEûHAVEûAûVIEWû MARKET LEVERAGEDûlNANCEûVALUATIONûMARKSû
SAIDûONEûSENIORûLEVERAGEDû THATûTHEûMARKETûISûGOINGûTOûGETû INûTHEûQUARTER ûAFTERûhANûABRUPTû
lNANCEûBANKER ûh3OMEûBANKSû WORSEûSOûTHISûISûTHEûBESTûPRICEû $URINGû'OLDMAN SûSECOND
SLOWDOWNvûINûTHEûSECONDûQUARTERû
WANTûTOûSELL ûANDûSOMEûDON T û YOU REûGOINGûTOûGET vûSAIDûTHEû QUARTERûEARNINGSûCALL û3OLOMONû SPARKEDûAûDOWNTURNûINûTHEû
4HATûMAKESûITûAûMOREûCOMPLEXû BANKER SAIDûTHEûTHINGûTHAT SûSLOWINGû LEVERAGEDûlNANCEûMARKETS ûCAUSINGû
SITUATIONûONûTHESEûDEALS v DOWNûCAPITALûMARKETSûACTIVITYûISû AûNUMBERûOFûTHEûDEALSûACROSSû
3POKESPEOPLEûFORûTHEûBANKSû PEOPLEûACCEPTINGûTHEûNEWûPRICEû VARIOUSûMARKETûPARTICIPANTSûTOûGETû
2ECENTLYû".00 ûONEûOFûTHEû DECLINEDûTOûCOMMENTûORûDIDûNOTû ENVIRONMENT ûh5LTIMATELY û MARKEDûDOWN ûTHEûBANKûSAID
UNDERWRITERSûOFûTHEûa BNûINû IMMEDIATELYûRESPONDûTOû COMPANIESûNEEDûTOûRAISEûCAPITAL û
REQUESTSûFORûCOMMENT 4HEYûWILLûlNDûTHATûNEWûCLEARINGû h3OMEûOFûTHOSEûDEALSûHAVEû
3ENIORûBANKERSûSAIDûTHEûMOVEû PRICE vûHEûSAID BEENûFUNDED ûANDûWE REûWORKINGû
WASûWIDELYûEXPECTEDûGIVENûTHEû PRIVATEûEQUITYûANDûHEDGEûFUNDSûINû THROUGHûANYûREMAININGû
IMPORTANCEûOFûTHEûhANNUALûCULLvû ADDITIONûTOûTECHNOLOGYû “We, at the end of EXPOSUREûTOûGETûTHEMûTHROUGHû
TOû'OLDMAN SûCULTURE û4HEûBANKû COMPANIES the quarter, used THEûMARKET vû"OF!ûlNANCIALûCHIEFû
HASûAûREPUTATIONûFORûREMOVINGûASû our best judgment !LASTAIRû"ORTHWICKûTOLDûANALYSTS
MUCHûASû ûOFûITSûWORKFORCEûINû #ONNORSûSAIDûBANKSûWEREû to mark where we
THEûCULLS STUNGûBYûBEINGûUNDERSTAFFEDûINû thought the deals !Tû*0û-ORGANûTHEûHITûWASû
ûDURINGûTHEûBOOMûANDûOVER
would clear” ABOUTû53 MûINûMARKDOWNSû
h9OUûGETûVERYûGOODûTRAININGû HIREDûINû ûh4HEREûISN Tû INûITSûBRIDGEûBOOK ûIMPACTINGû
FORûAûTIMEûnûTHENûYOU REûOUT vû ENOUGHûDEALûmOWûORûREVENUEûTOû &ORûNOW ûBANKSûHAVEûBEENû INVESTMENTûBANKINGûREVENUESûINû
ONEûBANKERûSAID ûh)T SûAûCYCLICALû GOûAROUND ûANDûTHEûBANKSûAREû UNABLEûTOûMOVEûCERTAINûBRIDGEû THEûQUARTER
BUSINESS û7EûHAVEûHADûTHREEû USEDûTOûHEADCOUNTûVOLATILITY ûTOûAû LOANSûOFFûTHEIRûBOOKSûORûAREû
YEARSûOFûGROWTHûWITHOUTûCUTSûSOû DEGREE ûWITHINûINVESTMENTû UNWILLINGûTOûTAKEûPRICESûTHEû "UTûITûCOULDûHAVEûBEENûWORSE û
YOUûMIGHTûEXPECTûTHEREûTOûBEû BANKINGûUNITS û!SûSUCH ûWEû MARKETûISûDICTATING û'OLDMANû *0û-ORGANû#%/û*AMIEû$IMONû
CUTSûGOINGûAHEAD v BELIEVEûHEADCOUNTûISûGOINGûTOû TOOKûAûMARK
TOûMARKETûHITûOFû SAIDûTHEûBANKûSHRUNKûITSûBRIDGEû
DECREASE vûHEûSAID ABOUTû53 M BOOK ûPRICINGûITSELFûOUTûOFûTHEû
"ANKSûLARGELYûSUSPENDEDû MARKETûINûWHATûWASûESSENTIALLYûAû
LAYOFFSûDURINGûTHEûCORONAVIRUSû !Tû#ITIGROUP ûHEADCOUNTûROSEû MORE TO COME RISKûMANAGEMENTûMANOEUVRE
PANDEMICûINûANûEFFORTûNOTûTOû ûASûDIDûCOMPûANDûBENElTû 4HEûTOTALûAMOUNTûOFûWRITEDOWNSû
EXACERBATEûECONOMICûSTRESS ûBUTûITû EXPENSES SOûFARûISûSMALLûRELATIVEûTOûAûBOOKû h/URûPERCENTûOFûTHATû;7ALLû
WASN TûENTIRELYûALTRUISTIC û$EALû OFûUNDERWRITTENûBRIDGEûLOANS û 3TREET=ûBRIDGEûBOOKûHASûCOMEû
mOWûSURGEDûINûTHEûYEARSûFOLLOWINGû h7EûAREûCONTINUINGûTOû ESTIMATEDûTOûBEûABOUTû53 BN û DOWNûSUBSTANTIALLYûJUSTûINûTHEû
THEûPANDEMICûASûCENTRALûBANKSû STRATEGICALLYûINVESTûINûTALENTûANDû !NDûTHEREûCOULDûTHEREFOREûBEû LASTû ûMONTHS û!NDûTHAT SûREALLYû
PUMPEDûLIQUIDITYûTHROUGHûCREDITû INûTHEûPLATFORM vû#ITIGROUPû#%/û JUSTûUNDERWRITINGûLOANûBYûLOANû
MARKETS ûINCREASINGûNEEDûFORû *ANEû&RASERûTOLDûANALYSTSûONûHERû BYûLOAN ûANDûYOUûWINûSOME ûYOUû
BANKERSûATûALLûLEVELS û!ûWARûFORû SECOND
QUARTERûCALL ûh9OU REû LOSEûSOME vû$IMONûSAID
TALENTûENSUEDûWITHûBANKSû GOINGûTOûSEEûUSûTAKEûAûSTRATEGICû
COMPETINGûNOTûJUSTûWITHûEACHû LOOKûATûTHISûONûAûLONG
TERMûLOOKû
OTHER ûBUTûALSOûWITHûTHEûBUYSIDE û RATHERûTHANûJUSTûAûSHOOTINGûFROMû
INCLUDINGûINVESTMENTûMANAGERS û THEûHIPûONûTHEûEXPENSESûSIDEû
BECAUSEûWE REûBUILDINGûTHEûlRMû
FORûTHEûLONGûTERMûHERE vû
International Financing Review July 23 2022 11
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15UK chancellor 17Thomas Jakob 19German bank
backs reforms joins NatWest appoints
to equity capital from UniCredit new sustainability
fundraising as part of to head its new chief to counter DWS
City overhaul European entity greenwashing
FRONT STORY RESULTS
Fixed income traders rescue second quarter
FICC revenues surge at US investment banks
Traders rode to the rescue in the second THEû&EDERALû2ESERVE SûANNUALûSTRESSûTESTûINûANû capital markets issuance reminded him of
QUARTERûWITHûREVENUEûFROMûlXEDûINCOMEû effort to meet rising capital requirements. the period in 2002 following the dotcom
currency and commodity trading surging by implosion.
MOREûTHANû ûTOû53 BNûACROSSûTHEûlVEû *0û-ORGANûMANAGEDûTOûWRESTLEDûTHEûMANTLEû
largest US banks, pumping up overall bank of top dog in equity trading from Morgan 3OLOMONûREITERATEDûTHATûHEûDOESN TûEXPECTû
revenues and smoothing out the damage Stanley in the quarter, with revenues rising capital markets activity to return to the
from a rout in investment banking. by 14.5% to US$3.1bn, the biggest surge in the record levels seen in 2021 anytime soon. But
quarter. Goldman continued to press the transactions should rebound from current
!CROSSûTHEûlVEûLARGESTû53ûBANKSû leader as well, with equity trading revenues WEAKûLEVELSûTOWARDSûAûlVE
YEARûAVERAGEû
investment banking revenues halved, rising by 11% to US$2.9bn. hSOMETIMEûOVERûTHEûCOURSEûOFûTHEûNEXTûFEWû
dragged down by steep declines in debt and QUARTERSv û)TûMIGHTûTAKEûAûLONGERûIFûECONOMICû
equity underwriting in the quarter. DOTCOM REDUX? uncertainty increased, he said.
7HILEûEQUITYûTRADINGûREVENUESûWEREûSTRONGû
Heading into the year, banks were in the quarter, equity underwriting Revenues from debt underwriting fell 50%
EXPECTINGûTRADINGûREVENUESûTOûhNORMALISEvû revenues plummeted by nearly 82% across ACROSSûTHEûlVEûBANKS û$#-ûREVENUESûHELDûUPû
to pre-pandemic levels. Surprisingly, the THEûlVEûBANKS ûWITHû'OLDMANûSEEINGûTHEû best at BofA, which saw revenues decline by
engine powering investment banks kept biggest decline in the quarter, of nearly 90% 40% to US$662m in the quarter. Citigroup
chugging in the quarter. Markets continued compared with a year earlier. HADûTHEûTOUGHESTûQUARTER ûWITHû$#-û
TOûFAVOURûTRADING ûWITHûGAINSûACROSSûTHEûlVEû revenues falling by 56% to US$271m.
banks including JP MORGAN, CITIGROUP, h9OUûHADûAûMEANINGFULûDECREASEûINûVALUESû
GOLDMAN SACHS, MORGAN STANLEY and BANK OF in the public market and in the private h)TûWASûAûTOUGHûCOMPARATIVEûQUARTERûFORûTHEû
AMERICA. Revenues from equity trading also MARKET vûSAIDû'OLDMANûCHIEFûEXECUTIVEû$AVIDû business as the industry investment banking
remained strong, rising by 8% in the quarter 3OLOMON û$OINGûANûINITIALûPUBLICûOFFERINGû FEEûPOOLûDECLINEDû vûSAIDû"OF!ûCHIEFû
to about US$11.8bn. takes months, sometimes years of lNANCIALûOFlCERû!LASTAIRû"ORTHWICK ûh7HILEû
preparation, he said. A sudden shift in the WEûACKNOWLEDGEûTHAT SûAûBIGûDROPûxûWEûVIEWû
Goldman saw the biggest surge in FICC in price by 20% or 30% derails the whole process. this level as temporary, and we believe it can
the quarter, with revenues rising more than RISEûBACKûTOûMOREûNORMALûLEVELSûINûTHEûNEXTû
55% to US$3.6bn, followed by Morgan Stanley h4HEYûCAN TûTURNûONûAûDIMEûANDûGETû few quarters when economic uncertainty
with FICC revenues of US$2.5bn in the EVERYBODY SûMINDûRESET vû3OLOMONûSAID û BECOMESûMOREûMUTED v
quarter, up 49% compared with a year earlier. adding that the anaemic nature of equity
Revenues from M&A advisory fell by 12%
h4HEREûAREûALWAYSûOPPORTUNITIESûWHEREû US BANKS AVERAGE % REVENUE CHANGE IN Q2 ACROSSûTHEûlVEûBANKS û'OLDMANûCONTINUEDûTOû
YOUûCANûTRYûANDûPICKûUPûSHARE vûSAIDû-ORGANû take the biggest haul in the quarter bringing
3TANLEYûCHIEFûEXECUTIVEû*AMESû'ORMANûONûAû 40 Equities in US$1.2bn, which was down about 5%
call with analysts. 30 year-on-year.
20 Advisory/
h7E REûINûAûBITûOFûANûUNCERTAINûWORLD û)ûDON Tû 10 Underwriting h4HERE SûNOûQUESTIONûIFûTHEûOVERALLû
think this is the time to be overly aggressive, operating environment were to deteriorate
PERSONALLY vûHEûSAID ûh3OûYEAH ûWE LLûBEû 0 FURTHERûORûIFûCONlDENCEûWEREûIMPAIRED ûWEû
OPPORTUNISTIC ûBUTûWE REûNOTûGOINGûTOûBEûGREEDY v FICC could see some softening even in our
ADVISORYûACTIVITIES û"UTûTO
DATE ûTHEY VEûBEENû
Citi also took advantage of opportunities -10 STRONG vûSAIDû'OLDMAN SûCHIEFûlNANCIALû
in the quarter, with FICC revenues rising by -20 OFlCERû$ENISû#OLEMAN
ûTOû53 BN û*0û-ORGANûPULLEDûBACKûINû -30
the quarter, cutting some US$44bn in risk- -40 *0û-ORGANûTOOKûTHEûBIGGESTûHITûINûTHEû
weighted assets, likely dampening a strong -50 quarter with advisory revenues falling by
quarter. Revenues rose by 15% to US$4.7bn. nearly 28% to US$664m.
4HEûBANKûCUTû27!SûFOLLOWINGûTHEûRESULTSûOFû Source: bank results, IFR calculations
Philip Scipio
International Financing Review July 23 2022 13
h-ARGINALûPLAYERSxMIGHTûSTRUGGLEû
TOûADAPTûWHENûTHEûNEWûTIDEûCOMESûINv
NATHANAEL BENJAMIN, EXECUTIVE DIRECTOR, BANK OF ENGLAND, P18
UK backs plans to relax pre-emption rules
The UK government has backed the FRAMEWORKvûAFTERûTHEûPANDEMICûRELAXATIONû issued share capital quickly and cheaply
RECOMMENDATIONSûOFûAûREVIEWûINTOûTHEû5+ Sû showed companies and their advisers had EACHûYEAR vûSAIDû!USTIN
EQUITYûCAPITAL
RAISINGûREGIMEûTOûFURTHERûRELAXû not abused the process.
pre-emption rules, in the hope such changes (OWEVER ûHEûSAIDûTHEû0%'ûSHOULDûPLAYû
will attract fast-growing companies to h7HATûYOUûSAWûINû#OVID
ûxûWASûTHISû more of a role, with companies and their
remain listed in London. special enactment where corporates and advisers reporting details of such
syndicate banks would try to honour pre- FUNDRAISINGSûANDûCOSTSûTOûTHEûGROUP ûh-OVINGû
$URINGûTHEûPANDEMICûTHEûRULESûWEREû emption as far as practicably possible. Not to this new threshold should be
changed to allow companies to issue up to only was it not abused, it was actually accompanied by appropriate rigour being
20% of their outstanding share capital, BENElCIAL vûHEûSAID ûPOINTINGûOUTûTHEûPOSITIVESû PUTûAROUNDûTHEûUSEûOFûTHEûREGIME vûHEûSAID
WITHOUTûNEEDINGûTOûlRSTûOFFERûTHEMûTOû of accelerated bookbuilds over rights issues.
shareholders, up from 10% previously. 0%'ûISûTOûBEûCHAIREDûBYûFORMERû3TANDARDû
h7ITHûAûRIGHTSûISSUE ûTHEûWHOLEûPROCESSû ,IFEû!BERDEENûCHIEFûEXECUTIVEû+EITHû3KEOCH
That appears to have been accepted by the gets going and the world can look very
market. Although the rules have reverted, DIFFERENTûSIX
TO
EIGHTûWEEKSûLATERûBYûTHEûTIMEû The review also recommended some
earlier this month online electricals retailer that offering launches. This change makes tweaks to fundraising timetables to make
!/ûFORûEXAMPLEûRAISEDûa MûINûANû SENSEûANDû) VEûHEARDûPOSITIVEûFEEDBACKûFROMû THEûPROCESSûEASIER û&ORûEXAMPLE ûITûSUGGESTEDû
accelerated bookbuild via an issue of 19.5% of INVESTORS v that the time that retail investors are able to
ITSûEXISTINGûCAPITAL ûWITHOUTûRAISINGûEYEBROWS û see a prospectus should be halved to three
SMOOTHER PEG days as part of plans to further digitise the
Now, as well as making the pandemic As well as revising pre-emption rules, the whole fundraising process.
changes permanent, the review by Mark review said the body monitoring how such
!USTIN ûPARTNERûATûLAWûlRMû&RESHlELDSû CAPITALûISûRAISEDûhSHOULDûBEûPUTûONûAûMOREû It also said the length of time for secondary
"RUCKHAUSû$ERINGER ûSAIDûCOMPANIESûINûHIGH
formal footing than it is currently and market offers, including rights issues, should
growth sectors such as technology or life brought front and centre as a key be reduced to seven days from 10, and the
sciences should additionally be able to lift STAKEHOLDERûINûTHEû5+ûCAPITALûMARKETSvûWITHû minimum notice period for general meetings
their pre-emption limit to as much as 75%. members appointed more transparently. to approve such fundraisings should also be
halved to seven days.
h)TûMAYûBEûAPPROPRIATEûFORûSUCHû Austin was careful to say this should be
companies to be able to raise more than 20% DONEûDELICATELYûSOûTHEû0RE
%MPTIONû'ROUPû 0ROSPECTUSESûSHOULDûBEûSHORTENEDûANDû
OFûTHEIRûEXISTINGûSHAREûCAPITALûNON
PRE
0%' ûANDûITSûOPERATINGûPRINCIPLESûDIDûNOTû replaced by a disclosure document focused
emptively each year and it should be open to BECOMEûCODIlEDûINûLAWûORûSUBJECTûTOûTHEû hONûNEWûINFORMATIONûABOUTûTHEûCOMPANYû
them to seek approval to do this – and not regulatory rulebook, so they could remain and the capital raise that is relevant for
frowned upon if they do. A limit of 75% is mEXIBLEûANDûREACTIVEûTOûMARKETûDEVELOPMENTS shareholders in deciding whether to invest
RECOMMENDED vûHEûSAID MOREûMONEYûINûTHEûCOMPANYv
2EGARDINGûTHEûRELAXATIONûOFûTHEûRULEû
h&ORûCOMPANIESûCOMINGûTOûMARKETûINûANû during the pandemic, the review said 4HATûWOULDûMEANûhTHEûCURRENTûLONGûANDû
)0/ ûTHEûPOSSIBILITYûOFûTHISûAPPROACHûSHOULDû companies should be able to ask at each EXPENSIVEûLEADûTIMEûTOûLAUNCHINGûAûFULLYûPRE
be noted in their offer documentation and annual general meeting to disapply the pre- emptive offer in the UK will be helped
for all companies it would be subject, as emption rules for up to 20% of their share materially by not always having to produce a
with the usual 20% threshold, to prior capital, with 10% for any purpose and 10% FULLûPROSPECTUSv û!ûCOMPANYûWOULDûONLYû
approval by shareholders at the annual FORûAûSPECIlCûUSEûSUCHûASûANûACQUISITION need to publish one if it wanted to raise
GENERALûMEETINGûEACHûYEAR v MOREûTHANû ûOFûITSûEXISTINGûSHAREûCAPITAL
h4HISûAPPROACHûHASûTHEûBENElTûOFûHAVINGû
One head of equity syndicate welcomed been tried and tested during the pandemic 4HEûHEADûOFûSYNDICATEûSAIDûhSHORTERûRISKû
the proposals. He said they effectively and means that issuers will be able on an PERIODSvûWEREûALWAYSûDESIRABLEûhASûMARKETû
FORMALISEDûWHATûWASûALREADYûBECOMINGûhAû ongoing basis to raise up to 20% of their risk is reduced for shareholders and issuers
more normalised part of the capital-raising INûTERMSûOFûTHEûOVERHANGûONûTHEûSTOCKûPRICEvû
BUTûSAIDûMARKETSûWEREûALREADYûhMOREû
Who’s moving where…
GOLDMAN SACHS will return to London Xavier Musca has been charge of the bank’s
tapped Todd Leland from Asia and join nominated as chief large clients division.
to serve as president the bank’s European executive of CREDIT Musca is currently
of Goldman Sachs management AGRICOLE’s Corporate deputy chief executive
International, committee. Sneader and Investment Bank of the group. He
reporting to the chief will become sole after current head started his career
executive officer of president of the APEJ Jacques Ripoll said in the French civil
the group, Richard group. Leland joined he would leave the service and ended
Gnodde. Leland is Goldman in 1992 and bank on September 1 as secretary general
currently co-president was named managing to become a partner to President Nicolas
of Goldman Asia- director in 2000 and of natural resources Sarkozy before joining
Pacific ex-Japan with partner in 2006. consultant Eren. Credit Agricole in
Kevin Sneader. Leland Musca will also take 2012.
14 International Financing Review July 23 2022
People
&Markets
DYNAMICvûTHANûINûTHEûPAST ûDOUBTINGûIFûITû Jefferies sharpens focus on
WOULDûMAKEûhAûHUGEûDIFFERENCEv investment banking
GOVERNMENT BACKING JEFFERIES FINANCIAL GROUP said it will sell parts could have got more value in a better
!USTINûSAIDûTHEûOVERALLûCHANGESûWOULDûSEEûhAû of its merchant banking portfolio in an market, but with the risks of recession
listing regime in the UK that is modernised effort to streamline its business to focus on rising, we believe it makes sense to
ANDûlTûFORûPURPOSE ûINCLUDINGûWHENû investment banking. monetise these businesses when
COMPAREDûTOûANYûOTHERûGLOBALûLISTINGûVENUEv COMMODITIESûPRICESûAREûHIGH v
Among operations being spun off or sold
As well as being supported by the AREû6ITESSEû%NERGY ûWORTHû53 M ûANDû *EFFERIESûSAIDûITûEXPECTSûTOûSPINûOFFû
government, regulator the Financial Idaho Timber, worth US$239m, according to HOLDINGSûINû6ITESSEû%NERGYûTOûSHAREHOLDERSû
#ONDUCTû!UTHORITY ûTHEû0%'ûANDûTHEû,ONDONû *EFFERIES before the end of the year, forming a new
3TOCKû%XCHANGEûITSELFûALSOûBACKEDûTHEû STANDALONEûENTITY û6ITESSEû%NERGY û!SûOFû-AYû
recommendations. *EFFERIESûALSOûPLANSûTOûSTREAMLINEûITSû 31, Vitesse had a net book value and net
corporate structure by merging its TANGIBLEûBOOKûVALUEûOFû53 M û*EFFERIESû
h7EûWELCOMEûTHEûlNDINGSûOFûTHEû INVESTMENTûBANK û*EFFERIESû'ROUP ûINTOûITSû said. The company will become a publicly
Secondary Capital Raising Review, which HOLDINGûCOMPANY û*EFFERIESû&INANCIAL ûBYûTHEû TRADEDûCOMPANYûLISTEDûONûTHEû.EWû9ORKû
WILLûGIVEûEXISTINGûCOMPANIESûMOREûOPTIONSû end of November. A single entity will 3TOCKû%XCHANGE û*EFFERIESûEXPECTSûTHATûITSû
WHENûRAISINGûCAPITAL vûSAIDû*ULIAû(OGGETT û eliminate the need for two sets of regulatory ownership interests in Vitesse will be
CHIEFûEXECUTIVEûOFû,3% ûWHICHûLIKEû)&2ûISû lLINGSûANDûOTHERûDUPLICATIVEûPROCESSES ûTHEû DISTRIBUTEDûTAX
FREEûONûAûPROûRATAûBASISûTOûITSû
OWNEDûBYû,ONDONû3TOCKû%XCHANGEû'ROUP bank said. shareholders.
Hoggett is also to chair a UK capital markets After the merger Matt Larson, currently “Their ability/willingness
industry taskforce, unveiled by the Treasury *EFFERIESû'ROUP SûCHIEFûlNANCIALûOFlCER ûWILLû to do this in difficult
last week at the same time as the government BECOMEûCO
#&/ûOFû*EFFERIESû&INANCIALûWITHû market conditions is
PUBLISHEDûITSûLONG
AWAITEDûlNANCIALûSERVICESû current CFO Teri Gendron, for the moment. positive for the stock”
and markets bill. This major piece of legislation 'ENDRONûHASûDECIDEDûTOûEXITûTHEûlRMûNEXTû
WILLûTWEAKûEXISTINGûRULESûFORûAûPOST
"REXITû5+ year, after which Larson will become sole *EFFERIESûSAIDûITûAGREEDûTOûSELLû)DAHOû4IMBERû
CFO. by the end of August, which is the end of
UK chancellor Nadhim Zahawi, speaking *EFFERIES ûlSCALûTHIRDûQUARTER ûFORû53 M û
at the Mansion House, said the bill would The decision to streamline its business 4HATûWILLûRESULTûINûANûESTIMATEDûPRE
TAXûGAINû
MEANûh5+ûlNANCIALûREGULATIONûWILLûONCEû comes after a couple of record years in of US$140m.
again be decided in the United Kingdom, for investment banking and also winds down
THEû5NITEDû+INGDOM ûBYûTHEû5+ SûEXPERT û the legacy holdings of Leucadia National. The bank said the spin-off of Vitesse and
INDEPENDENTûREGULATORSv ,EUCADIAûBOUGHTû*EFFERIESûINû ûFOLLOWINGû sale of Idaho Timber will bring the book
THEûlNANCIALûCRISISûANDûINû ûREORGANISEDû value of its legacy merchant banking
4HEûTASKFORCEûISûDESIGNEDûhTOûMAXIMISEû ITûUNDERûTHEû*EFFERIESû&INANCIALû'ROUPûNAME û portfolio below US$1bn, from US$1.6bn at
THEûIMPACTûOFûCAPITALûMARKETûREFORMSvûANDû the end of May.
will have senior representatives from all 4HEûMOVEûISûALSOûINûLINEûWITHû*EFFERIES û Philip Scipio
parts of the capital markets process, from strategy to free up capital by selling down its
issuers to investors as well as advisers, merchant banking businesses, the proceeds
lawyers and others involved. of which can be reinvested in the main
investment banking and capital markets
h)TûISûVITALûTOûENSUREûTHEû5+ûCAPITALû business or returned to shareholders, said
MARKETSûCONTINUEûTOûPROVIDEûEFlCIENTûACCESSû Morgan Stanley bank analyst Betsy Graseck
to capital, which enables businesses to start, in a note.
grow, scale and stay here, and provide all
savers and investors with access to the best h4HEIRûABILITY WILLINGNESSûTOûDOûTHISûINû
possible assets, generating the best possible DIFlCULTûMARKETûCONDITIONSûISûPOSITIVEûFORûTHEû
GROWTHûPOTENTIAL vûSAIDû(OGGETT STOCK vû'RASECKûSAID ûh9ES ûMAYBEû;THEY=û
Christopher Spink
Please contact us if you have information about job moves: [email protected]
WELLS FARGO for the independent Boutique investment Blair’s existing
named Mary Katherine oversight of credit bank WILLIAM BLAIR financial services
DuBose head of its risk management has hired three coverage. Josh Funt
secured lending practices and lending bankers from Truist and Louis Oliver are
division, covering the decisions across for its tech-enabled joining as directors
bank’s asset-based the bank for line- services investment working out of
lending, equipment of-business credit banking practice. Atlanta. All three will
finance, supply chain policies. She has held Blake Jones, pictured, focus on the financial
finance and inventory various leadership is joining the bank as services sector.
finance. DuBose positions at Wells, managing director
was most recently including head of in Chicago and will
Wells’ chief credit capital markets. play a key role in the
officer, responsible expansion of William
International Financing Review July 23 2022 15
Bellwether !3û)3û#534/-!29 ûANYû*0û-ORGANûBANKERûHEADINGûOFFû
on holiday will be well advised to spend some time
Bellwether: n. From the practice of placing a bell around the FAMILIARISINGûTHEMSELVESûWITHûTHEûBANK SûRECOMMENDEDû
summer reading list. But the tomes are so numerous and
neck of a castrated ram so that it might lead its flock WEIGHTYûTHEY DûBUSTûTHEûBAGGAGEûLIMITSûONûMOSTûCOMMERCIALû
mIGHTS
(3"#û)3û&/.$ûOFûAûlVE
YEARûPLAN ûSOûITûPERHAPSûSHOULDN TûCOMEû
ASûAûSURPRISEûTHATûTHEûBANK Sû#HINESEûOPERATIONûHASûINSTALLEDûAû "UTûDON TûWORRY û"ELLWETHER SûREADûTHEûLOTûnûWELL ûSCANNEDû
communist party committee in its investment banking subsidiary. THEûBLURBûnûSOûYOUûDON TûHAVEûTO ûANDûRECOMMENDSûTHATûIFû
you only read one turgid, pompous, management book full
!PPARENTLY ûTHISûHASûNOTHINGûTOûDOûWITHû%WENû3TEVENSON Sû of entirely useless business-bloke-as-superman cobblers
desire to control everything from the centre, but was THISûSUMMERûMAKEûSUREûIT SûTHIS ûh#%/û%XCELLENCE û4HEû3IXû
set up by some like-minded members of staff – a bit like -INDSETSû4HATû$ISTINGUISHûTHEû"ESTû,EADERSûFROMûTHEû2ESTvû
MINDFULNESSûSESSIONSûORûlVE
A
SIDEûFOOTBALLûGAMES BYû#AROLYNû$EWAR û3COTTû+ELLERûANDû6IKRAMû-ALHOTRA
4HEûMOVEûRAISESûCONCERNSûTHATû(3"# SûPIVOTûTOû!SIAûISûBECOMINGû 4HEûBLURBûSAYSûTHEûBOOKûSHOWSûhHOWûTHEûBESTûLEADERSû
more of a topple. So in the interests of balance, perhaps some of establish game-changing visions for their companies – and
its London-based staff could set up a 1922 committee. HOWûYOUûTOOûCANûMODELûYOURSELFûONûTHEûVERYûBESTv
-EANWHILE ûTHEûIDEAûOFû7ESTERNûBANKSûEMBRACINGûCOMMUNISMû 4HEûAUTHORSûHAVEûDRAWNûONûINTERVIEWSûWITHûhTOPû
ISN TûASûFAR
FETCHEDûORûNEWûASûITûSOUNDS û$URINGûTHEûGO
GOûYEARSûATû CORPORATEûLEADERSv ûINCLUDINGûSOMEûCHAPûCALLEDû*AMIEû$IMON
$EUTSCHEû"ANKûINûTHEû SûWHENûTOPûPERFORMERSûEARNEDûEYE
WATERINGûBONUSES ûSOMEûSAIDûTHEû'ERMANûLENDERûRANûAû-ARXISTû For normal people, it might be a hard pass; but those
MODEL ûWHEREûTHEûBANK SûCAPITALûWASûEXPLOITEDûBYûLABOUR WORKINGûATû*0û-ORGANûSHOULDûPROBABLYûBUYûITûSOûTHEYûCANûBEû
SEENûPRETENDINGûTOûREADûITûINûTHEûOFlCE
$%543#(%û"!.+û-$ Hamish Badenoch had a very good
REASONûTOûBEûOUTûOFûTHEûOFlCEûLASTûWEEKûBUTûHEûKEPTûITûTOû ).û4(%/29 û4(%û02ûDEPARTMENTûATû-EDIOBANCAûCANûRELAXû
himself. Hamish, who is head of real estate transformation following the appointment of Antonio Horta-Osorio as a
ATû$EUTSCHE ûWROTEûINû4HEû3PECTATORûTHATûHEûRESISTEDûTHEû senior adviser.
TEMPTATIONûTOûCHANGEûHISûOUT
OF
OFlCEûTO ûv) MûNOTûINûTHEû
OFlCEûASû) MûHELPINGûMYûWIFEûRUNûFORûPRIMEûMINISTERv Horta-Osorio kept the comms team on their toes during
his brief stint as chairman of Credit Suisse, ultimately
But Hamish is back behind his desk now. After a strong leaving after breaching Covid rules so he could attend
initial showing in the leadership race his wife, Kemi 7IMBLEDONûANDûWATCHûTHEû%UROSûFOOTBALLûlNAL
"ADENOCH ûWASûELIMINATEDûATûTHEûQUARTER
lNALûSTAGE
"UTûTHERE SûAûPOTENTIALûREDûmAG û7IMBLEDONûMAYûBEûAûDISTANTû
4HERE SûNOûSHAMEûINûTHATûBUTûITûDOESûENDû$EUTSCHE SûINTERESTûINû MEMORY ûBUTûWITHûTHEû7ORLDû#UPûlNALûTAKINGûPLACEûTHISûYEARûINû
THEûTOURNAMENTûAFTERû3AJIDû*AVID SûELIMINATIONûINûTHEûlRSTûROUND $ECEMBERûFORûTHEûlRSTûTIME ûWILLûTHEûBANKINGûMAVERICKûBEûABLEû
TOûRESISTûHEADINGûTOû1ATARûFORûAûPRE
#HRISTMASûBOOZE
UPûINûTHEû
.OWûIT SûDOWNûTOûTHEûlNALûTWOûWITHû,IZû4RUSSûFACINGû2ISHIû FANûZONE û
3UNAK û7HILEû4RUSSûHASûNOûBANKINGûEXPERIENCE û3UNAKû
worked at Goldman Sachs. Is the Squid about to make it all
the way to Number 10?
Who’s moving where…
GOLDMAN SACHS Morrison lost the EVERCORE hired group at Goldman, STANDARD Asia, and Keith Cheung
has hired former federal elections to senior managing leading automotive CHARTERED has is head of debt
Australian treasurer Labor and Frydenberg directors Chris Buddin technology, clean made changes to syndicate for Greater
Josh Frydenberg as lost his seat. He from Goldman Sachs technology and its Asia syndicate China and North Asia.
a senior regional previously served for its technology renewables and structure, a year Lee and Cheung report
adviser for Asia- as minister for the group and Jason communication after its last regional to Tan. Tan has been
Pacific. Frydenberg environment and Fournier from JP technology banking. syndicate head left. at StanChart since
was the treasurer of energy, minister for Morgan for its equity Fournier previously Edric Tan has been 2017, having previously
Australia from August resources, energy and capital markets led the consumer and named head of debt worked for Barclays.
2018 until May 2022, Northern Australia, group. Buddin was retail ECM practice at syndicate for Asia. Lee has been with
when the Liberal/ assistant treasurer a managing director JP Morgan. Valerie Lee is head of StanChart since 2013,
National coalition of and parliamentary in the technology, debt syndicate for while Cheung joined
prime minister Scott secretary to the PM. media and telecoms ASEAN and South in 2010.
16 International Financing Review July 23 2022
People
&Markets
Jakob to head NatWest’s Europe arm
NATWEST has appointed Thomas Jakob chief That is headed by Vincent Goedegebuure, branch. He is replaced in that position by
EXECUTIVEûANDûCHAIRMANûOFûITSûNEWû%UROPEANû who joined in May from ABN AMRO. Simon Buckley.
ENTITY û.AT7ESTû"ANKû%UROPEû'MB(
*AKOBûWILLûSTARTûHISûNEWûROLEûINû!UGUST û(Eû %ARLIERûTHISûMONTH ûTHEûBANKûALSOû
The arm will support UK-based corporate joins from UniCredit, where he was in APPOINTEDû!LEXANDRAû-IANIûHEADûOFû
ANDûlNANCIALûSPONSORûCUSTOMERSûOFûITSû CHARGEûOFû3OUTH7ESTû'ERMANYûFORûCORPORATEû CORPORATEûCOVERAGE ûDEBTûANDûlNANCINGû
,ONDON
LISTEDûPARENTûEXPANDûONûTHEû banking and advisory. He will report to SOLUTIONSûFORûTHEû%UROPEANû5NIONûARM û3HEû
continent. They will also be able to access Andrew Blincoe, managing director, WASûPREVIOUSLYûHEADûOFû$#-ûFORûlNANCIALû
THEûBANK SûSTRUCTUREDûlNANCEûARM CORPORATEûBANKINGûANDûSTRUCTUREDûlNANCE institutions in Iberia.
Current corporate customers of the UK Robert Fries has been appointed chief -IANIûREPLACEDû2OLANDû0LAN ûWHOûWASû
BANKûBASEDûINû7ESTERNû%UROPEûWILLûSTILLû OPERATINGûOFlCEûOFûTHEûNEWûENTITYûANDû APPOINTEDûINTERIMûCHIEFûEXECUTIVEûANDûCHAIRû
MAINLYûBEûCOVEREDûBYû.AT7ESTû-ARKETSû.6 ûAû Werner WeglûCHIEFûRISKûOFlCER û&RIESûWASû OFûTHEûNEWûUNITûUNTILû*AKOB SûARRIVAL
non-ring-fenced entity located in Amsterdam. PREVIOUSLYûINûCHARGEûOFû.AT7EST Sû'ERMANYû
Christopher Spink
JP Morgan names three to FIG roles in Asia-Pacific
JP MORGANûISûBOLSTERINGûITSûlNANCIALû SENIORûROLESûACROSSû&)'ûANDû3OUTH
%ASTû!SIAû for eight years as part of the team covering
INSTITUTIONSûGROUPûCOVERAGEûFORû!SIA
0ACIlC û at Morgan Stanley. lNANCIALûINSTITUTIONSûACROSSû%ASTû!SIA ûASû
according to an announcement seen WELLûASûASSETûMANAGERSûINû!SIA
0ACIlC
BYû)&2û!SIAûANDûCONlRMEDûBYûAû -URLIDHARû-AIYA ûWHOûWASû*0û-ORGAN Sû
spokesperson. PREVIOUSû!SIA
0ACIlCûHEADûOFû&)' ûINû*ANUARYû Tony He has been appointed head of China
changed roles to become head of equity &)' û(EûWASûHEADûOFûCORPORATEûlNANCEûATû*0û
Kelvin Goh has joined the bank as head of CAPITALûMARKETSûFORû!SIA
0ACIlC -ORGANû3ECURITIESû #HINA ûHAVINGûJOINEDû*0û
&)'ûFORû!SIA
0ACIlC Morgan in 2013.
In a newly created position, Michael Melly
Goh is based in Singapore and joins from HASûBEENûNAMEDûHEADûOFû3OUTH
%ASTû!SIAû&)' û 'OHûREPORTSûTOû0AULû5REN ûHEADûOFû
Citigroup, where he was head of FIG for in addition to his role as head of market INVESTMENTûBANKINGûFORû!SIA
0ACIlC û-ELLYû
!SIA
0ACIlC û(EûHASû ûYEARSûOFûINVESTMENTû infrastructure and asset management in and He report to Goh.
BANKINGûEXPERIENCE ûINCLUDINGûTIMEûSPENTûINû !SIA
0ACIlC û-ELLYûHASûBEENûWITHû*0û-ORGANû
Daniel Stanton
BNP Paribas’ global head of prime services leaves
BNP PARIBAS ûGLOBALûHEADûOFûPRIMEûSERVICESû ,INKED)N û(EûMOVEDûTOû".0û0ARIBASûFROMû The deal involved the transfer of some 900
Ashley Wilson has resigned, the bank $EUTSCHEû"ANKûINû*UNEûLASTûYEAR PEOPLEûFROMû$EUTSCHEû"ANKûTOû".0û0ARIBAS û
CONlRMEDûLATEûONû4HURSDAYûINûRESPONSEûTOûAû and was completed at the end of 2021.
Reuters report. 4HEûMOVEûMARKSûAûHIGH
PROlLEûDEPARTUREû
from the business, which primarily serves hedge Nicolas Marque, head of global equities,
h".0û0ARIBASûWOULDûLIKEûTOûEXTENDûOURû FUNDS ûANDûWHICHû".0û0ARIBASûHADûBEENûBUILDINGû WILLûMANAGEûPRIMEûSERVICESûUNTILû7ILSON Sû
THANKSûANDûBESTûWISHESûTOû!SHLEYû7ILSONûASû out since 2019 when it agreed to acquire the successor is appointed, the bank said.
he pursues opportunities outside of the PRIMEûlNANCEûBUSINESSûOFû$EUTSCHEû"ANK
BANK vûAûSPOKESPERSONûFORûTHEû&RENCHûLENDERû )NûTHEûlRSTûQUARTERûOFûTHISûYEAR û".0û
said. 7ILSONûANDûHISûTEAMûWORKEDûONû posted revenue of €1.1bn in its equities and
completing the integration of the prime services business, up 61% on the year-
7ILSONûDIDûNOTûRESPONDûTOûREQUESTSûFORû BUSINESSES û".0û0ARIBASûSAIDûINûITSûSTATEMENTû earlier period.
comment sent via his work email and about his departure.
Sinead Cruise, Lawrence White
Please contact us if you have information about job moves: [email protected]
Alex To, co-head BANK OF AMERICA LAZARD hired BRYAN GARNIER HOLOMATIC, a SUMITOMO MITSUI
of Asia-Pacific has added a FIG Prasad Parmeshwaran has appointed Alex Chinese autonomous BANKING CORP has
investment banking at investment banker as a managing director Cogut as head of driving technology named Priya Bellino as
BANK OF AMERICA, with a focus on in its healthcare healthcare equity startup, has hired head of ESG solutions
has left the bank. Southern Europe to group. Parmeshwaran research, leading a former UBS senior for Asia-Pacific. Bellino
To is understood its Paris office. David joins Lazard from team of seven analysts banker Yankun Hou as was most recently part
to be pursuing Villa de Vasconcelos Cowen where he was in the UK and Europe. chief financial officer. of EY’s sustainable
opportunities outside will report to Michael a managing director He joins from Kempen Hou was formerly finance business
the banking industry. Coppock. He was credited with building & Co where he was UBS vice-chairman of consulting practice.
To joined BofA in 2014 previously in the FIG its healthcare M&A co-head of life sciences investment banking Before that, she worked
from Morgan Stanley team at Standard group. He joined research. He will report for Asia-Pacific. He for 17 years at Goldman
as head of China Chartered. Cowen from Goldman to John Klein, head of joined UBS in 2011 Sachs in London and
investment banking. Sachs. equity research. from Nomura. Singapore.
International Financing Review July 23 2022 17
h4HEREûAREûALWAYSûOPPORTUNITIESû
WHEREûYOUûCANûTRYûANDûPICKûUPûSHAREv
JAMES GORMAN, CHIEF EXECUTIVE, MORGAN STANLEY, P13
Germany hands €15bn bailout to
Uniper after Russian gas hit
The German government stepped in NEEDûTOûPROTECTû%UROPE SûSECURITYûOFûSUPPLYû ARCHITECTURE ûWHICHûHASûEXPOSEDûTHEûGROUPû
to rescue UNIPER with a €15bn bailout INûAûTIMEûOFûWAR vûHEûSAID to billions in losses.
on Friday after the gas importer became
THEûBIGGESTûCASUALTYûOFû%UROPE SûENERGYû !TûAûNEWSûCONFERENCE û3CHOLZûASKEDûTHEû The parties intend to agree on the longer-
standoff with Russia so far, reported country to pull together, invoking the popular term solution by the end of 2023, they said.
Reuters. SONGûLYRICûh9OU LLûNEVERûWALKûALONEvûINû%NGLISH û
while announcing the Uniper bailout. Germany has accused Russia of
Under a bailout that is among the biggest DELIBERATELYûSTRANGLINGûGASûmOWSûTOû%UROPEûONû
in German corporate history, the Under the agreement, Germany will buy SPURIOUSûPRETEXTSûINûRETALIATIONûFORû7ESTERNû
government will take a 30% stake in Uniper, 157m new ordinary Uniper shares for sanctions after the invasion of Ukraine.
reducing the ownership of its Finnish parent €267m and make available capital of up to Moscow denies doing so and said it is ready to
FORTUM to 56% from nearly 80% after weeks €7.7bn against issuance of mandatory FULlLûALLûITSûCOMMERCIALûOBLIGATIONS
of tough negotiations. convertible instruments.
A drop in Russian gas supplies meant that,
It will also allow Uniper to start passing In addition, state-lender KFW will raise an rather than being able to rely on long-term price
on some of the costs of soaring gas prices to EXISTINGûCREDITûLINEûBYûõ BNûTOûõ BNûINûTOTAL AGREEMENTS û5NIPERûHADûTOûBUYûEXPENSIVEûGASûONû
consumers in the coming months, which the spot market to make up for the shortfall.
'ERMANûCHANCELLORû/LAFû3CHOLZûSAIDûWOULDû 3CHOLZûSAIDûTHEûGOVERNMENTûWOULDû
be offset by more welfare support to shield eventually relinquish its stake. Germany has said that utilities risked a
poorer households. collapse similar to that of the Lehman
CONDITIONS AND APPROVALS Brothers bank, whose demise helped to
4HEûBAILOUTûUNDERSCORESûHOWû2USSIA Sû The package needs approval from the TRIGGERûTHEû ûlNANCIALûCRISIS
invasion of Ukraine in February has major %UROPEANû#OMMISSION ûANDûREQUIRESû
IMPLICATIONSûFORûGOVERNMENTSûACROSSû%UROPEû CONlRMATIONûOFû5NIPER SûINVESTMENTûGRADEû &ORTUM Sû2AURAMOûSAIDûITûWASûTOOûEARLYûTOû
as they grapple with soaring energy costs RATINGûBYûAGENCYû3 0 û4HEûDEALûALSOûNEEDSû estimate what the total losses for Uniper and
and fears of acute gas shortages over the the backing of Uniper shareholders. Fortum would be as these depended on the
peak demand winter months. PRICEûANDûQUANTITYûOFû2USSIANûGASûTOû%UROPE û
It carries certain conditions, including
Uniper shares plunged by more than 30% that Uniper withdraws a lawsuit against the Fortum and the German government
to record lows following the announcement. Netherlands over its coal phase-out as well have agreed that Germany will cover 90% of
Fortum shares were 3% lower. ASûAûCOMMITMENTûBYûTHEû$UESSELDORF
BASEDû price increases, which means Fortum would
group to suspend dividend payments for the need to cover the rest.
h7EûAREûLIVINGûTHROUGHûANûUNPRECEDENTEDû duration of its stabilisation period.
ENERGYûCRISISûTHATûREQUIRESûROBUSTûMEASURES vû h)NûTHEûMEANTIME ûWEûHAVEûTHEûõ BNûTOTALû
SAIDû&ORTUMû#%/û-ARKUSû2AURAMO ûADDINGû Following the rescue, Uniper, Fortum liquidity facility, which can be drawn upon
THATûTHEûDEALûREmECTEDûTHEûINTERESTSûOFûALLû and the German government will work just to cover the cash impact but eventually
PARTIES ûh7EûWEREûDRIVENûBYûURGENCYûANDûTHEû on a long-term solution to reform the losses will be covered by an equity-like
COMPANY SûWHOLESALEûGASûCONTRACTû INSTRUMENT vû2AURAMOûSAID
Essi Lehto, Holger Hansen, Christoph Steitz
Get ready for tougher times, Bank of
England tells banks
Investment banks need to prepare for h)TûISûHIGHLYûPROBABLEûTHEREûAREûINDIVIDUALû -ANYûOFûTHEûNICKELûPOSITIONSûWEREûhOVERûTHEû
tougher times ahead by properly checking businesses or marginal players that have COUNTERvûANDûOUTSIDEû"RITAIN ûANDû"ENJAMINû
risks from their clients as a prolonged period relied upon the easy conditions of the past said banks need to learn lessons from that.
OFûCHEAPûMONEYûENDS û"ANKûOFû%NGLANDû decade who might struggle to adapt when the
EXECUTIVEûDIRECTORû.ATHANAELû"ENJAMINûSAIDû NEWûTIDEûCOMESûIN vû"ENJAMINûTOLDûANûEVENTû h2ISKûCONCENTRATIONûSHOULDûNOTûONLYûBEû
ONû7EDNESDAY û2EUTERSûREPORTED held by UK Finance, a banking industry body. assessed on a client by client basis, but
ACROSSûALLûCLIENTSûCOMBINED vû"ENJAMINûSAID
)NmATIONûINû"RITAINûREACHEDûAû
YEARûHIGHû h"ANKS ûEXECUTIVEûMANAGEMENTûANDû
OFû ûINûDATAûPUBLISHEDûONû7EDNESDAYûANDû boards should challenge themselves and h7HILSTûTHISûINFORMATIONûMAYûNOTûBEû
"O%ûGOVERNORû!NDREWû"AILEYûHASûSAIDûTHEREû THINKûAHEADûABOUTûWHATûTHEIRûlRM SûPLACEûISû READILYûAVAILABLE ûTHEûONUSûISûONûlRMSûTOû
WILLûBEûhNOûIFSûNOûBUTSvûWHENûITûCOMESûTOû INûTHISûNEWûWORLD v demand of their clients the information they
raising rates to quell rising prices – and NEEDûTOûASSESSûTHEûRISKSûTHEYûAREûEXPOSEDûTO v
MAKINGûCREDITûMOREûEXPENSIVEûFORûCLIENTSûOFû Benjamin, responsible for supervision of
banks. international banks in London, said the Benjamin said it was for the banks, not
collapse of Archegos Capital Management the regulator, to ask the right questions, and
Benjamin said there is a generation of and, earlier this year, suspension of nickel IFûCLIENTSûDON TûWANTûTOûGIVEûANûANSWERûTHENû
BANKERSûWHOûHAVEûONLYûEXPERIENCEDûAûLARGELYû trading in London after the metal spiked to hMAYBEûYOUûNEEDûTOûDRAWûAûCONCLUSIONûFROMû
benign economic environment when banks record highs showed that counterparty risk THATv
MADEûhVERYûLARGEvûPROlTSûANDûNOWûLENDERSû concentrations were not being appropriately
have to learn to swim in a different situation. IDENTIlEDûORûCONTROLLEDûATûBANKS h7EûAREûREALLYûTRYINGûTOûPUSHûFORûMOREûONû
THAT vû"ENJAMINûSAID
Huw Jones
18 International Financing Review July 23 2022
People
&Markets
DB shifts comms chief into sustainability seat
"ATTLINGûAûREPUTATIONALûlRESTORMûOVERû &IXLERûSAIDû$73ûHADûMADEûMISLEADINGûCLAIMSû covered CSR as well as communications.
ALLEGEDûGREENWASHINGûATûITSû$73ûASSETû of how green or sustainable some its products %IGENDORFûCONTINUESûTOûREPORTûTOû$EUTSCHEû
management arm, DEUTSCHE BANK has WERE ûWHICHû$73ûANDû$EUTSCHEûHAVEûDENIED û
appointed Joerg Eigendorf to the newly- h$73ûWILLûCONTINUEûTOûREMAINûAûSTEADFASTû #%/û#HRISTIANû3EWING ûWHOûCALLEDûHIMûhAû
CREATEDûROLEûOFûCHIEFûSUSTAINABILITYûOFlCERûTOû PROPONENTûOFû%3'ûINVESTINGûASûPARTûOFûITSû LEADINGûlGUREûFORûSOMEûYEARSûNOWûINûDRIVINGû
hCONTINUEûTOûEXPANDûTHEûBANK Sû lDUCIARYûROLEûONûBEHALFûOFûITSûCLIENTS vû$73ûSAIDû OURûBANK SûSUSTAINABILITYûSTRATEGYv
sustainability area with a view to further last year after the allegations became public.
developing the strategy and implementing h3USTAINABILITYûISûAûCRITICALûSUCCESSûFACTORû
ITûWITHûMOREûINTENSITYv ûITûSAID 4HEûlRMSûALSOûCITEûANûINDEPENDENTûREPORTû for our bank and a central element in our
nûCOMMISSIONEDûBYû$73ûnûTHATûFOUNDûNOû @'LOBALû(AUSBANK ûSTRATEGY vû3EWINGûSAID
The appointment of its former global evidence for the allegations.
HEADûOFûCOMMUNICATIONSûASûITSûlRSTû#3/û The bank carved out a separate sustainability
RAISEDûEYEBROWSûAMONGû%3'ûPROFESSIONALS û %VENûSO ûFORMERû#%/û!SOKAû7OEHRMANNû DEPARTMENTûUNDERû%IGENDORFûLASTûYEAR û4HEûAREAû
3PEAKINGûONûAûPANELûATûTHEû/XFORDû resigned in May after German police raided HASûhATTRACTEDûAûLOTûOFûINTERNALûANDûEXTERNALû
3USTAINABLEû&INANCEû3UMMIT û$ESIREEû&IXLERû $73 SûHEADQUARTERSûASûPARTûOFûANû TALENTûINûTHEûLASTûYEARSv ûAûSPOKESMANûADDED û
nûTHEûFORMERûSUSTAINABILITYûHEADûATû$73û investigation into the allegations.
who turned whistleblower – said that the Viktoriya Brand remains head of group
CHIEFûSUSTAINABILITYûOFlCERûROLEûNEEDSûTOû LEADING FIGURE SUSTAINABILITY û3HEûREPORTSûTOû%IGENDORF û
move from a marketing and $ESPITEûCONCERNSûOVERû%IGENDORF SûCREDENTIALS û
communications function to a compliance $EUTSCHEûINSISTEDûTHATûHEûHADûhPLAYEDûAûMAJORû $EUTSCHEûDISCLOSEDûINû-ARCHûITSûlRSTûDATAû
ANDû#
SUITEûROLEûFORûTOPûEXECUTIVESûTOûENSUREû PARTûINûSHAPINGvûITSû%3'ûSTRATEGY û(EûWASû ONûlNANCEDûEMISSIONS û)TûALSOûREAFlRMEDûAû
lRM
WIDEûALIGNMENTûANDûACCOUNTABILITY responsible for sustainability for more than COMMITMENTûTOûPUBLISHû ûNET
ZEROû
SIXûYEARSûASûPARTûOFûHISûPREVIOUSûROLE ûWHICHû targets and 2030 intermediate targets for
hKEYûCARBONûINTENSIVEûPORTFOLIOSvûBYûTHEûENDû
of this year.
Julian Lewis
Interpath expands into Caribbean
2ESTRUCTURINGûlRMûINTERPATH ADVISORY has JURISDICTIONS û)TûWASûTHEûlRSTû#AYMANû KEYûPRIORITYûFORûUS vûSAIDû)NTERPATHûCHIEFû
bought liquidator Kalo, which has LIQUIDATORûOFûAûGROUPûBASEDûINûTHEû0EOPLE Sû EXECUTIVEû"LAIRû.IMMO
operations in the British Virgin Islands, the 2EPUBLICûOFû#HINAûANDûTHEûlRSTû"6)û
Cayman Islands and Anguilla. LIQUIDATORûOFûAû$UBAIûBUSINESS û-ANYûGLOBALû 4HEûDEALûWILLûSEEû+ALO SûCHIEFûEXECUTIVEû
businesses have some subsidiaries in these Gordon MacRae join Interpath along with
)NTERPATHûWASûSPUNûOUTûOFû+0-' Sû5+û LOCATIONS ûNORMALLYûFORûTAXûPURPOSES û managing directors #HARLOTTEû#AULlELD, Elizabeth
business in May 2021 with backing from making it a hotbed of restructuring activity Mackay and Paul Pretlove. In all, 30 professionals
private equity investor HIG Capital. too. will move across. MacRae leads the Cayman
Interpath already has a business in OFlCEûANDû0RETLOVEûTHEû"6)ûONE ûWHICHûISûTHEû
Barbados. h"6)ûANDû#AYMANûAREûSOûOFTENûATûTHEû largest restructuring practice there.
centre of international restructurings and
Kalo has been operating for over 20 years INSOLVENCIES ûSOûSECURINGûAûSIGNIlCANTû %ARLIERûTHISûYEAR û)NTERPATHûEXPANDEDûINTOû
and has been involved in numerous foothold in these jurisdictions was always a Ireland, making some hires there.
COMPLEXûRESTRUCTURINGûACTIVITIESûINûITSû Christopher Spink
HSBC says CCP units have ‘no influence’
HSBC said employees who form branches of INSTALLEDûAû#HINESEû#OMMUNISTû0ARTYû HSBC did not give details on the number
THEû#HINESEû#OMMUNISTû0ARTYûWITHINû committee within the business. of its staff who were members of any such
PRIVATEûCOMPANIESûINû#HINAûHAVEûhNOû branch, but did say it did not track the
INmUENCEvûONûTHEûRUNNINGûOFûTHEûBUSINESS û !û##0ûCOMMITTEEûISûREQUIREDûBYû#HINESEû POLITICALûAFlLIATIONSûOFûITSûWORKFORCE
following media reports on Thursday that companies law but it not yet widely
such a unit had been established at its China ENFORCEDûAMONGûFOREIGNûlNANCEûGROUPS û The London-headquartered bank raised its
securities unit. according to the report. stake in the China brokerage joint venture
to 90% from 51% in April.
HSBC did not directly comment to Reuters The committees serve a dual purpose as a
on whether such a branch had been WORKERS ûUNIONûANDûTHEûMEANSûBYûWHICHûAû )Nû!PRIL û0INGû!NûCALLEDûONû(3"#ûTOû
ESTABLISHED ûBUTûSAIDûTHEYûhAREûCOMMONûANDû party representative is installed within a EXPLOREûSTRATEGICûOPTIONSûSUCHûASûSPINNINGû
CANûBEûSETûUPûBYûASûFEWûASûTHREEûEMPLOYEESv û COMPANY SûTOPûRANKS ûSOMETIMESûINûAû off its mainstay Asian business to unlock
ANDûTHATûTHEYûHADûNOûINmUENCEûONûTHEûBUSINESSû director or management role. greater shareholder value. In response,
nor formal role in its day-to-day activities. HSBC hired advisers including London-based
HSBC said that management had no part INVESTMENTûBANKû2OBEYû7ARSHAWûTOûASSISTû
The statement followed a report in the in establishing the branch formed by its on a review of its strategy but has not yet
Financial Times citing two people familiar employees, and that the branch would have DIRECTLYûCOMMENTEDûONû0INGû!N SûDEMANDS û
with the matter as saying that HSBC had hNOûFORMALûROLEûINûTHEûDAYûTOûDAYûACTIVITIESûOFû Lawrence White, Anshuman Daga
THEûBUSINESSv
International Financing Review July 23 2022 19
h4HISûAPPROACHûHASûTHEûBENElTûOFûHAVINGû
BEENûTRIEDûANDûTESTEDûDURINGûTHEûPANDEMICv
MARK AUSTIN, PARTNER, FRESHFIELDS BRUCKHAUS DERINGER, P14
NN IP launches new fund
%3'ûINVESTOR NN INVESTMENT PARTNERS has bullish on volume despite the recent long term, this could really become a very
launched a new social impact bond fund SLOWDOWN û4HEûlRMûSEESûSOCIALûBONDû LARGEûFUND vû"OSûSAID
TOûINVESTûINûPROJECTSûWITHûSOCIALûBENElTSû issuance picking up towards the end of the
FORûSPECIlCûPOPULATIONSûANDûISûPREDICTINGû year and thinks that spiralling energy costs )TûWILLûALIGNûWITHûTENûOFûTHEû5.û3$'SûTHATû
issuance of €250bn this year in the area. due to the war in Ukraine could accelerate have social goals and target deals that
social bond issuance. promote affordable basic infrastructure
..û)0ûDESCRIBEDûSOCIALûBONDûISSUANCEûASû such as water and sanitation, access to
hONEûOFûTHEûFASTEST
GROWINGûSEGMENTSûOFû h4HISûYEARûHASûTURNEDûOUTûTOûBEûONEûOFû essential services in education and health,
SUSTAINABLEûINVESTMENTSvûASûITûFUNDSûSOCIALû the worst starting years in terms of affordable housing, employment, food
development and helps investors to align PERFORMANCEûFORûlXEDûINCOMEûEVER û!ûLOTû security, and socioeconomic advancement
THEIRûPORTFOLIOSûANDûlNANCIALûOBJECTIVESûWITHû of issuance is postponed because of the and empowerment.
THEûSOCIALûTARGETSûOFûTHEû5. Sû3USTAINABLEû uncertainty in the markets, but it is likely
$EVELOPMENTû'OALS there will be more issuance in the second )TûWILLûBEûCLASSIlEDûASûANû!RTICLEû ûFUNDû
HALFûOFûTHEûYEARûANDûALSOûINTOûNEXTûYEAR vû UNDERû%UROPE Sû3USTAINABLEû&INANCEû
h)Nû ûWEûEXPECTûANûISSUANCEûOFû Bos said. $ISCLOSUREû2EGULATION ûWHICHûHASû
€250bn. Our outlook for growth SUSTAINABLEûlNANCEûASûITSûOBJECTIVE ûANDûWILLû
OPPORTUNITIESûISûPOSITIVE vûSAIDû"RAMû"OS û There are currently only a handful of BEûMANAGEDûASûANûIMPACTûFUNDûBYû..û)0 û
lead portfolio manager green, social and SOCIALûBONDûFUNDSûINû%UROPE û!MUNDIû along with four green bond funds that have
IMPACTûBONDSûATû..û)0 launched its Social Bond Strategy fund more than €5bn of assets under
INû$ECEMBERû ûANDû#OLUMBIAû management.
Social bond issuance has dropped 4HREADNEEDLEûHASûBEENûRUNNINGûAûa Mû
markedly amid a wider market slowdown SOCIALûBONDûFUNDûSINCEû ûBUTû..û)0û The fund will invest in global social bonds
FOLLOWINGû2USSIA SûINVASIONûOFû5KRAINEûAFTERû EXPECTSûMOREûASSETûMANAGERSûTOûISSUEûSOCIALû and euro-denominated money market
reaching US$164.8bn in 2020 and bond funds. instruments rated AAA to BBB–, and can also
US$191.95bn in 2021 when the instrument INCLUDEûSUSTAINABILITYûBONDSû AûMIXûOFûGREENû
was used to fund social projects relating to INVESTMENT STRATEGY ANDûSOCIAL ûTHATûALLOCATEûATûLEASTûHALFûOFûTHEû
THEûPANDEMIC ûACCORDINGûTOû2ElNITIVûDATA 4HEû..û , û3OCIALû"ONDûFUNDûWILLûINVESTûINû proceeds to social projects.
debt issued by companies, governments and
Only US$58.7bn of social bonds have been quasi-sovereign entities and is starting at 7HILEûTHEûBENCHMARKûISûEURO
issued in 2022 to-date, which is 59.3% lower õ M ûBUTûTHEûhDARKûGREENvû$UTCHûINVESTORû denominated, the fund can invest up to 30%
than over the same period last year. In the EXPECTSûITûTOûGROWûQUICKLY INûSOCIALûBONDSûINûOTHERûCURRENCIES ûASû..û)0û
second quarter, US$23.15bn of deals were ISûEXPECTINGûTHEûASSETûCLASSûTOûINCREASEû
issued, compared with US$48.9bn a year h7EûDOûFEELûTHERE SûAûLOTûOFûINTERESTûFORû globally. It will only invest in social bonds
earlier, the data show. social bonds so in one year from now the that are labelled as such and are aligned
fund should be north of €100m, but in the WITHû)#-! SûSOCIALûBONDûPRINCIPLES
Total outstanding social bonds now total Tessa Walsh
õ BNûACCORDINGûTOû..û)0 ûWHICHûREMAINSû
SLBs ‘more effective’ than green bonds
Sustainability-linked bonds could be more h)Fû3,"SûAREûDESIGNEDûWELL ûTHEYûCANûBEû h!TûTHEûMOMENT ûWEûHAVEûAûLOTûOFû
effective in driving the energy transition genuinely transformative; green bonds are sustainability-linked issuance where you
THANûhUSEûOFûPROCEEDSvûINSTRUMENTSûSUCHûASû NOTûINûTHATûCATEGORY v HAVEûALLûTHESEû+0)SûANDûTHEûEMPIRICALûWORKû
green bonds due to their ability to impact HASN TûBEENûDONEûTOûREALLYûUNDERSTANDûIFû
COMPANIES ûCOSTûOFûCAPITAL ûAûLEADINGû%3'û Caldecott is also the founder of a new they reduce risk and improve
lNANCEûACADEMICûSAID SUSTAINABLEûlNANCEûLABûTHATûISûBEINGûCREATEDûTOû environmental outcomes, which is the
ACCELERATEûACTIONûACROSSûTHEûlNANCIALûSYSTEMûTOû WHOLEûPOINTûOFûTHEûSTRUCTURE vûHEûSAID
However, SLBs, which tie pricing to the ACHIEVEûNETûZEROûGOALS ûSTRENGTHENûCLIMATEû
ACHIEVEMENTûOFû%3'ûTARGETS ûNEEDûMOREû action and introduce biodiversity targets. Caldecott also believes that the effects of
WORKûTOûENSUREûWHICHû+0)SûANDûINCENTIVEû MULTIPLEû+0)SûNEEDûTOûBEûBETTERûUNDERSTOODû
structures drive real change for different %3'
LABELLEDûDEBTûISSUANCEûHASûGENERALLYû to allow greater variation in deal pricing. In
issuers, sectors and geographies to avoid slowed this year in line with a broader market addition, this should vary the costs of capital
greenwashing allegations, according to DECELERATIONûAFTERû2USSIA SûINVASIONûOFû for companies that are issuing SLBs and
"ENû#ALDECOTT ûDIRECTORûOFûTHEû/XFORDû Ukraine, but SLB issuance has held steady with sustainability-linked loans, which can have
3USTAINABLEû&INANCEû'ROUPûATû/XFORDû Aû ûINCREASEûINûTHEûlRSTûHALFûOFûTHEûYEAR û THREEûTOûlVEû+0)S
University. 53 BNûOFû3,"SûWEREûISSUEDûINûTHEûlRSTûSIXû
months of 2022, compared with US$40.3bn a h4HERE SûBEENûVERYûLITTLEûWORK ûIFûANY ûONû
h3,"SûCOULDûBEûONEûOFûTHEûMOSTû YEARûEARLIER ûACCORDINGûTOû2ElNITIVûDATA understanding the positive and negative
effective instruments for driving change feedback loops associated with having all
BUTûATûTHEûMOMENTûTHERE SûANûAWFULû 3,"ûISSUANCEûISûEXPECTEDûTOûPICKûUPûASûTHEû THESEûDIFFERENTû+0)SûTOGETHERûnûDOûTHEYû
LOTûOFûGREENWASHINGûANDûCONFUSION vû market stabilises. Caldecott sees the use of interact positively with each other, do they
Caldecott said, speaking at the inaugural transition plans as critical to maintain the undermine each other, or do they just
TWO
DAYû/XFORDû3USTAINABLEû&INANCEû CREDIBILITYûOFûTHEû3,"ûPRODUCTûANDûTHATû+0)Sû CONFUSEûEVERYONE vû#ALDECOTTûSAID
Summit. need to be tightened and tested to ensure Tessa Walsh
that they are achieving results.
20 International Financing Review July 23 2022
BONDS
SSAR Corporates 25 FIG 26 High-Yield Structured Finance
FRONT STORY CORPORATES
Corporates braced for buyers’
market post-summer
ECB’s diminished presence expected to change issuance landscape
Step-ups and improved covenant packages to feature more
Further uncertainty is expected in the INVESTMENT
GRADEûSIDE û;"UT=ûTHERE SûMOREû FEATURESûSUCHûASûSUB
INVESTMENT
GRADEûCOUPONû
European corporate primary market after the mOWûINû)'ûSOûTHEûMARGINûOFûERRORûISûSMALLER v STEP
UPSûANDûIMPROVEDûCOVENANTûPACKAGES û
summer holidays with the European Central .ETûASSETûPURCHASESûUNDERûTHEû%#" Sû!00 û
Bank no longer acting as a marginal buyer !ûSECONDûSYNDICATEûOFlCIALûSAIDûTHEû INCLUDINGûTHEû#300 ûENDEDûONû*ULYû û
and other investors potentially seeking MAJORITYûOFûHIGHûGRADEûISSUERSûWOULDûBEûlNE û
greater protections. Syndicate bankers are h)NûTHEûPAST ûWEûWEREûABLEûTOûDOûAûLOTûOFû
also evaluating whether ensuring execution h&ORûTHEûMAJORITYûOFû)'ûISSUERS ûIT SûOKAY û deals from weak Triple B minus or crossover
via hard underwriting will be too risky given BUTûFORûASSETSûWHEREûYOU VEûGOTûSIGNIlCANTû NAMESûTHATûDIDN TûMAKEûSENSE ûJUSTûBECAUSEû
heightened market volatility. pushback like real estate or that have THEû%#"ûWASûTHERE vûTHEû$#-ûHEADûSAID
EXPOSUREûTOû2USSIAûORûOTHERûCREDITûSPECIlCû
There is no sign yet of an end to tricky RISK ûTHOSEûTYPESûOFûISSUERSûMAYûNEEDûIT v h7EûDIDN TûPUTûINûLARGEûSTEP
UPSûFORûAûPOSSIBILITYû
CONDITIONSûTHATûMARREDûlRST
HALFûSALESûVOLUMESû of being downgraded because the ECB wouldn’t
DUEûTOûAûSCARCITYûOFûGO
DAYS ûAMIDûELEVATEDûNEWû Some bankers though highlighted how the have bought it. So these discussions – do we need
ISSUEûCONCESSIONûLEVELSûANDûVIOLENTûINTRA
DAYû market has turned to be more challenging for to have credit enhancements for weaker credits?
moves in rates. Market jitters stemming from underwriting since the war in Ukraine broke nûALLûTHESEûTHINGSûAREûCOMINGûBACKûNOW v
MONETARYûTIGHTENINGûTOûTACKLEûINmATION ûTHEû out. The potential for underestimating the
WARûINû5KRAINEûANDûAûTHREATENEDûCUT
OFFûINûGASû WORST
CASEûSCENARIOûMEANSûTHEREûISûAûREALûRISKû 3PLIT
RATEDû)TALIANûANDû2OMANIANûSHOPPINGû
supplies from Russia have exacerbated AûDEALûMAYûNOTûLANDûATû)04S CENTREûOWNERû)'$ûATTEMPTEDûTOûTAPûTHEû
recessionary concerns for the continent. MARKETûFORûAûõ MûlVE
YEARûBOND û
h5NDERWRITINGûISûGENERALLYûANûOPENûTOPIC û INCORPORATINGûSUCHûAûFEATURE ûALTHOUGHûTHEû
“This is almost a blank week [in Europe especially when the market is skittish. But it deal was eventually pulled.
FORûSENIORûNOTES= û-EANWHILE ûINûTHEû53ûITûHASû doesn’t mean that it works that way every
BEENûTHEûlFTH
BUSIESTûWEEKûOFûTHEûENTIREûYEARû TIME vûSAIDûAûTHIRDûSYNDICATEûBANKER There are some very tentative hopes the ECB
;INCLUDINGûlNANCIALS= vûSAIDûAûSYNDICATEûHEAD will restart corporate bond buying in light of the
h/FûCOURSE ûCERTAINûTRANSACTIONSûWILLûLOOKû central bank’s newly announced Transmission
There has not been a single issue in the into that but there’s a cost attached to it ... we 0ROTECTIONû)NSTRUMENT ûAFTERûITûmAGGEDûPRIVATEû
%UROPEANûHIGH
GRADEûCORPORATEûMARKETûSINCEû don’t have the market to do that now for the sector securities could be considered under the
0EPSI#O Sûa MûTWO
TRANCHEûOFFERINGûONû*ULYû CERTAINTYûOFûEXECUTION ûWHENûAûDEALûCOULDûBEû TOOL ûBUTûOBSERVERSûAREûSKEPTICAL
ûWITHû!AREALû"ANKûBEINGûTHEûONLYû&)'û UNDERSUBSCRIBEDûATû)04SûTHATûMIGHTûSTARTû BPû
borrower to bring a euro senior unsecured TOû BPûBACKûOFûWHEREûFAIRûVALUEûISûSEEN v “We do not see this as any real “ECB credit
PAPERûTHISûWEEK û4HEûõ MûTHREE
YEARûNOTEû PUTvûINûTERMSûOFûREACTIVATIONûOFûTHEû#300 û û7Eû
CAMEûATûANûEYE
CATCHINGû BPûSPREAD û)Nû RETURN OF SUB-IG STEPS ALSOûDOûNOTûCONSIDERûTHEû40)ûASûBEINGûRELEVANTûFORû
CONTRAST ûTHEû53ûMARKETûSAWû"ANKûOFû!MERICAû !TûTHEûSAMEûTIME ûISSUERSûSHOULDûBEûPREPAREDû AûCOUNTRYûLIKEû'ERMANYûINûCASEûOFûAûTAILûEVENTûONû
PRINTûAû53 BNûTHREE
PARTûISSUEûONû4UESDAY û TOûPROVIDEûINVESTORSûSTRONGERûPROTECTION ûWITHû 2USSIANûGAS vûWROTEû"ARCLAYSûCREDITûANALYSTS
its biggest senior unsecured offering this year.
WIDER SPREADS %VENûWITHOUTûTHEû%#"ûFACTOR ûISSUERSûWEREû
7HILEûWELL
FUNDEDû%UROPEANûCORPORATESû iBOXX EURO SENIOR NON-FINANCIALS INDEX facing an increased need to cater to the
may prefer to remain on the sidelines until needs of investors given the market’s
CONDITIONSûAREûSETTLED ûINFREQUENTûISSUERS û bp RECESSIONûANDûINmATIONûCONCERNS
ESPECIALLYûTHOSEûSEEKINGûSTRATEGICûlNANCINGû 140
ANDûHAVEûLIMITEDûMARKETûACCESS ûCOULDûBEû “Now that CSPP is not investing new
inclined to ask syndicate banks for hard 130 MONEY ûIT SûDElNITELYûHARDERûFORûISSUERSûTOû
underwriting commitments. RESISTûADDINGûSUB
)'ûCOUPONûSTEPSûIFûTHEYû
120 really should be included and this could be
h)SSUERS ûPROPENSITYûTOûASKûFORû especially pertinent given we are at the end
;UNDERWRITING=ûWILLûGOûUP ûBUTûOFûCOURSE û 110 OFûTHEûCREDITûCYCLEûWITHûRATESûGOINGûUP ûCREDITû
THERE SûAûPRICEûFORûIT vûSAIDûAû$#-ûHEAD û QUALITYûWORSENINGûANDûDEFAULTSûEXPECTEDûTOû
h)SSUERSûDIDN TûSEEûTHEûVALUEûINûITûINûSTRONGû 100 INCREASE vûSAIDûTHEûlRSTûSYNDICATEûHEAD
MARKETSûANDû)ûTHINK ûNOW ûISSUERSûWILLû
POTENTIALLYûSEEûMOREûVALUEûINûIT v 90 “Standards for investor protection and
DOCUMENTATIONûALWAYSûINCREASEûBECAUSE û
h)NûHIGH
YIELDûLAND ûWEûPROBABLYû 80 OTHERWISE ûINVESTORSûJUSTûDON TûNEEDûTOûORû
underwrite 80% of everything that we’re WON TûBUYûANYûMORE ûSOûTHISûWOULDûNATURALLYû
DOING ûSOûOFûCOURSEûWEûCANûDOûITûONûTHEû 70 BEûHAPPENINGûANYWAY ûEVENûIFûITûWASN TûFORû
#300ûENDING v
60 Jihye Hwang
50
40 Apr May Jun Jul
Jan Feb Mar
2022
Source: Markit/Refinitiv
International Financing Review July 23 2022 21
Levfin market repricing forces WEEK IN NUMBERS
bank rethink 3.26%
Banks search for ways to deal with fast-sinking hung debt THE YIELD ON THE TWO-YEAR
TREASURY, NEARLY 20bp HIGHER
7ITHûTHEûCOLLAPSEûINûRISKûAPPETITEûINûHIGH
This follows the substantial hit 03/01/22THAN THAT ON THE 10-YEAR TREASURY
yield and CLO markets continuing to stymie CRYSTALLISEDûEARLIERûTHISûMONTHûBYû*0û 03/02/22INDICATING RECESSION RISKS
BANKS ûATTEMPTSûTOûOFmOADûAROUNDûõ BNn -ORGAN û-ORGANû3TANLEY û-EDIOBANCAûANDû 03/03/22
õ BNûOFûCOMMITTEDûlNANCE ûLENDERS û "ARCLAYSûONû û(OLDINGS û- !
RELATEDû 03/04/22%
strategies are diverging with some taking lNANCINGûPACKAGE ûINCLUDINGûTHEûSALEûOFû 03/05/223.5
ADVANTAGEûOFûGREATERûBALANCE
SHEETûCAPACITYû õ MûINûSECUREDûNOTES ûAû53 MûTERMû 03/06/223.0
to hold risk while others prefer to sell down LOANû"ûANDûAûa M
EQUIVALENTûTERMûLOANû!û 03/07/222.5
THEIRûPOSITIONSûANDûTAKEûAûlNANCIALûHITûUPû INûEUROSûnûALLûATûANû/)$ûOFûAROUNDû û4HEû 2.0
front. collective loss could be as much as €200m 03/01/221.5
INCLUDINGûTHEûMARKET
TO
MARKETûPRICEûONûAû 03/02/221.0
“There’s a lot of pressure from risk a MûDELAYEDûDRAWûTERMûLOANû! 03/03/220.5
COMMITTEESûTOûDE
RISKûANDûBEûMOREûSELECTIVEû 03/04/22
WHENûTAKINGûONûNEWûlNANCINGûDEALSûDUEûTOû 0RECEDINGûTHATûWASû"ELGIUMûDRY
BULKû 03/05/22Source: Refinitiv
HEIGHTENEDûEXECUTIONûRISK vûSAIDûONEû CHEMICALSûDISTRIBUTORû-ANUCHAR Sûõ Mû 03/06/22
syndicate banker with a small volume of lVE
YEARûNON
CALLûTWOûSENIORûSECUREDûNOTEû 03/07/2224
these deals still in his pipeline. SALEûATû/)$ûOFû ûVIAû#REDITû3UISSEûINû*UNE
THE NUMBER OF MONTHS THAT
“There’s a lot of pressure from !NDûTHENûTHEREûISûTHEûSAGAûOFûTHEû UKRAINE IS SEEKING TO DEFER
risk committees to de-risk and -ORRISONS ûBUYOUTûlNANCINGûWHEREû PAYMENTS ON ITS EUROBONDS FROM
be more selective when taking 'OLDMANû3ACHS û".0û0ARIBAS û"ANKûOFû AUGUST 1 AS THE COUNTRY SEEKS TO
on new financing deals due to !MERICAûANDû-IZUHOûHAVEûTAKENûAûBEATINGû PRESERVE CASH FOR THE WAR EFFORT
heightened execution risk” ASûTHEYûATTEMPTEDûTOûOFmOADûTHEûRISKûOVERûAû
PERIODûOFûMONTHS ûWITHûPRICESûDECLININGû 43bp
Lenders are understood to largely own after each placement.
debt underwritten prior to the market THE JUMP IN THE YIELD IN 10-YEAR
downturn at around 97 cents on the euro or )NûEARLYû*UNE û-ORRISONS ûUNDERWRITERSû BTPS FROM AN INTRADAY LOW OF 3.27%
HIGHER ûWHILEûRECENTûLOANSûANDûHIGH
YIELDû FURTHERûPRIVATELYûPLACEDûõ MûOFûSENIORû ON WEDNESDAY TO 3.7% BY THURSDAY
bond offerings have cleared only at huge secured euro notes at a price of 85. AFTER MARIO DRAGHI RESIGNED AS
discounts to face value as banks battled to ITALY’S PRIME MINISTER
lure investors to buy. h7HATEVERûCOUPONûYOUûSEEûONûTHESEûDEALS û
the fair assumption is that underwriters %
!LSO ûPRICINGûmEXIBILITYûISûSLIM û4HEûSTANDARDû HAVEûBASICALLYûPUTûMOSTûOFûTHEIRûlREPOWERû 5
PRICEûmEXûRIGHTSûHOVEREDûBETWEENû BPûTOû INTOûTHATûCOUPONûANDûTHEû/)$ vûSAIDûAûSOURCEû
BPûBEFOREûTHEû2USSIA 5KRAINEûWAR ûWHILEû with knowledge of one those deals. 4
NOWûARRANGERSûWOULDûPUSHûFORûAûlGUREûOFû h!NYWHEREûFROMû;ANû/)$ûBELOW=û ûISûWHEREû
ABOVEû BP ûTHEûSYNDICATEûBANKERûSAID BANKSûSTARTûTOûLOSEûMONEY v 3
There are signs that direct lenders are Volatile market conditions have also hit 2
stepping into the void – at least partially. CLO managers that were hitherto one of the
There were no investment banks lending on more consistent avenues for distributing 1
%UROMONEY Sûa BNû,"/ ûWITHû!RESû LEVERAGEDûLOANS û!SûCREDITûMARKETSûHAVEû
-ANAGEMENTûPROVIDINGûTHEûlNANCINGûTOûTHEû TANKED ûTHEûMACHINEûTHATûREPACKAGEDûTHISû Source: Refinitiv
PRIVATEûEQUITYûCONSORTIUMûBUYINGûTHEû DEBTûINTOûTRANCHEDûBONDSûHASûSTALLED ûNOTû
lNANCIALûPUBLISHER LEASTûBECAUSEûTHEûSPREADSûDEMANDEDûBYûEND
50bp
investors have widened dramatically right
But banks are shifting to try to counter ACROSSûTHEûCAPITALûSTRUCTURE ûWITHûRECENTû THE HIKE IN THE ECB’S DEPOSIT RATE,
the massive increase in direct lending 4RIPLEû!ûNOTESûPRICINGûASûWIDEûASû BPûOVERû FROM –0.5% TO 0% IN ITS FIRST INTEREST
activity. %URIBOR ûVERSUSû BPûINû-AY û4HISûSAVAGEû RATE RISE IN MORE THAN 10 YEARS
repricing has managers scrambling to work
!ûSPOKESPERSONûFROMû*0û-ORGANû out what to do with piles of loans they 9.4%
CONlRMEDûTHEûBANKûHASûSETûUPûAûDIRECTû accumulated at higher cash prices before the
LENDINGûUNITûTOûHOLDûLEVERAGEDûLOANS ûAMONGû recent slump. THE UK’S ANNUAL INFLATION RATE
OTHERûASSETS ûTOûMATURITY û/THERûBANKSûAREû IN JUNE, UP FROM 9.1% IN MAY, WITH
looking at similar strategies. One syndicate ,ASTûWEEK û0IMCOûBOUGHTûMOREûTHANû ECONOMISTS FORECASTING IT TO GO
OFlCIALûSAIDûITûHADûOBVIOUSûBENElTSûFROMûTHEû õ BNûOFûLOANSûBACKINGûPRIVATEûEQUITYûlRMû HIGHER STILL
PERSPECTIVEûOFûDEALINGûWITHûMARK
TO
MARKETû !POLLO SûTAKEOVERûOFû7ORLDLINE SûPAYMENTSû
VOLATILITY û!NOTHERûBANKERûSAIDûHISû business at a price of around 85 from a
institution was not happy selling a good group of banks led by Barclays and Bank of
asset at any price. !MERICA
h)TûISûREALLYûHARDûTOûlNDûSUFlCIENTûLIQUIDITYû
for the larger deals – outside of the direct
LENDERûSPACE vûTHEûSECONDûBANKERûSAID
Alex Chambers, Lorena Ruibal
22 International Financing Review July 23 2022
BONDS SSAR
SSAR Russian nexus within the bank is believe we are much more anchored in the
UNCHANGED û.$"ûMAYûBEûUNABLEûTOûRESTOREû $OUBLEû! û;BRACKET= v
US DOLLARS its favourable access to US dollar capital
MARKETS v )NûTHEûABSENCEûOFûBENCHMARKSûSOûFARûINû
NDB EYES POST-SUMMER WINDOW û-4.SûANDû#0SûHAVEûBEENû.$" Sû
Maasdorp said the downgrade was vehicles to raise US dollars.
Steeper funding costs will be the most the result of the war in Ukraine and
immediate impact of Fitch’s downgrade of ASSOCIATEDûSANCTIONS ûRATHERûTHANûTHEû )TûPRICEDûAûPAIRûOFû53 MûTWO
YEARû-4.Sû
NEW DEVELOPMENT BANK if it comes to the US ISSUER SûlSCALûPOSITION ûh4HEûONE
NOTCHû INû-AY ûACCORDINGûTOû2ElNITIVûDATA ûONEûWITHû
DOLLARûMARKETSûAFTERûTHEûSUMMERûLULL û,ESLIEû DOWNGRADEûBYû&ITCHûxûISûNOTûDRIVENûBYû Aû ûCOUPONûANDûTHEûOTHERûWITHûAû û
-AASDORP ûVICE
PRESIDENTûANDûCHIEFûlNANCIALû any of the metrics associated with the rate.
OFlCERûATûTHEûSUPRANATIONALûTOLDû)&2 BANK SûLIQUIDITY ûANYûMETRICSûASSOCIATEDûWITHû
THEûBANK SûOVERALLûFUNDINGûFRANCHISE vûHEû ALL INTERNATIONAL GREEN BONDS
“There is roughly a 15bp to 20bp SAID ûh)T SûREALLYûASSOCIATEDûWITHûTHEûEXTERNALû BOOKRUNNERS: 1/1/2022 TO DATE
DIFFERENCEûBETWEENûAû$OUBLEû!ûANDûAû$OUBLEû RISK v
! ûxû4HEûEXTENTûOFûTHEûINCREASEûOFûTHEûCOSTû Managing No of Total Share
of funds will only be known when we bank or group issues US$(m) (%)
ACTUALLYûTAPûINTOûTHEûMARKET vûHEûSAID
BREAK WITH S&P 1 Bank of America 57 12,342.07 7.0
-AASDORPûSAIDû.$"ûWASûLOOKINGûATûTHEû Fitch’s move was a break from S&P’s 2 BNP Paribas 67 12,018.23 6.8
POST
SUMMERûWINDOWûINû3EPTEMBERûANDû immediate reaction to the war in relation to 3 JP Morgan 55 10,116.21 5.7
/CTOBERûFORûAû53ûDOLLARûBENCHMARK ûTHOUGHû .$" SûRATING û4HREEûDAYSûAFTERûTHEûOUTBREAKû 4 Credit Agricole 60 9,000.90 5.1
he noted that will depend on market OFûlGHTING û3 0ûAFlRMEDû.$" Sû!! ûRATING û 5 Citigroup 67 8,702.43 4.9
CONDITIONS ûh)TûMIGHTûBEûTHATûWEûDON TûMEETû STATINGûTHAT ûh!LTHOUGHû2USSIAûISûAûMAJORû 6 HSBC 59 8,271.13 4.7
OURûTARGET vûHEûSAID ûhANDûWEûWILLûMAYBEû SHAREHOLDER ûWEûEXPECTûTHEûONGOINGû2USSIA
7 Deutsche Bank 46 8,106.52 4.6
MOVEûSOMEûOFûITûOVERûTOûTHEûlRSTûQUARTERûOFû 5KRAINEûCONmICTûTOûHAVEûAûLIMITEDûIMPACTûONû 8 Barclays 28 6,366.96 3.6
NEXTûYEAR vû)Nû-ARCH ûTHEûISSUERûSAIDûITûHADû THEûBANK v 9 NatWest Markets 18 5,544.76 3.1
an approved borrowing programme of 10 Goldman Sachs 37 5,370.49 3.0
US$7bn for 2022. #OMMENTINGûONûTHATû!! ûRATING û 270 176,958.82
Maasdorp said: “We will be hoping to Total
That is despite Fitch’s assessment last EXPLAINûTOûINVESTORSûTHAT ûASûAûCREDIT ûWEû
WEEKûTHAT ûGIVENû2USSIA SûALMOSTû û Excludes social bonds and mixed use of proceeds. SDC code: JG1
SHAREHOLDINGûINûTHEûSUPRANATIONAL ûh.$"û Source: Refinitiv
COULDûFACEûCHALLENGESûTOûISSUEûAûLONG
TERMû
BONDûONû53ûCAPITALûMARKETS ûINCLUDINGû ALL INTERNATIONAL BONDS (ALL CURRENCIES) ALL BONDS IN EUROS
WORKINGûWITHû53ûlNANCIALûINSTITUTIONSûTOû BOOKRUNNERS: 1/1/2022 TO DATE BOOKRUNNERS: 1/1/2022 TO DATE
ARRANGEûANDûUNDERWRITEûISSUANCE ûGIVENû
reputational risk associated with a bank Managing No of Total Share Managing No of Total Share
WITHûLARGEû2USSIANûOWNERSHIPv bank or group issues US$(m) (%) bank or group issues €(m) (%)
4HEûAGENCYûDOWNGRADEDû.$"ûTOû!!ûFROMû 1 JP Morgan 622 195,933.88 8.6 1 BNP Paribas 235 64,246.81 8.3
!! ûWITHûAûNEGATIVEûOUTLOOKûBECAUSEûOFûITSû 2 Citigroup 537 163,474.81 7.2
Russia ties. 3 Bank of America 537 162,066.18 7.1 2 JP Morgan 174 54,630.99 7.0
4 Goldman Sachs 385 131,681.00 5.8
&ITCHûSAID ûh!SûLONGûASûTHEû2USSIA
5KRAINEû 5 Barclays 440 109,985.30 4.8 3 Deutsche Bank 170 46,269.96 5.9
CONmICTûREMAINSûONGOING û2USSIAûREMAINSû 6 BNP Paribas 443 105,360.08 4.6
subject to Western sanctions or the 7 Morgan Stanley 377 104,175.09 4.6 4 Credit Agricole 168 43,899.31 5.6
8 HSBC 431 99,157.22 4.3
9 Deutsche Bank 395 98,967.34 4.3 5 Barclays 135 40,589.09 5.2
10 Credit Agricole 321 66,527.04 2.9
2,876 2,282,263.37 6 Societe Generale 152 38,914.49 5.0
Total
7 HSBC 157 37,970.75 4.9
8 UniCredit 139 32,386.78 4.2
9 Citigroup 126 32,111.34 4.1
10 Bank of America 108 30,952.26 4.0
Total 847 778,008.44
Including Euro, foreign, global issues. Excluding equity-related debt, Including Euro-preferreds. Excluding equity-related debt,
US Global ABS/MBS. US Global ABS/MBS.
Source: Refinitiv SDC code: J1 Source: Refinitiv SDC code: N1
EUROPEAN SOVEREIGN BOND AUCTION RESULTS WEEK ENDING JULY 22 2022
Pricing date Issuer Size Coupon (%) Maturity Average Yield (%) Bid-to-cover
Oct 22 2027 1.208 2.08
Jul 18 2022 Belgium €931m 0 Jun 22 2032 1.854 2.08
Jun 22 2053 2.532 1.56
Jul 18 2022 Belgium €1.604bn 0.350 Jan 31 2039 2.641 2.56
Oct 15 2027 0.960 1.11
Jul 18 2022 Belgium €1.177bn 1.400 Aug 15 2030 1.050 1.25
May 31 2025 1.416 1.92
Jul 19 2022 UK £2bn 1.125 Jan 31 2027 1.754 1.75
Oct 31 2032 2.535 1.58
Jul 19 2022 Germany €2.684bn 1.300 Feb 25 2025 1.000 2.30
Feb 25 2028 1.470 2.69
Jul 20 2022 Germany (green) €1.282bn 0 May 25 2028 1.420 1.83
Mar 1 2028 2.94
Jul 21 2022 Spain €1.131bn 0 Jul 25 2031 -0.980 2.13
Jul 25 2053 -0.520 2.48
Jul 21 2022 Spain €1.535bn 0 Jan 31 2025 0.070 2.53
Jul 21 2022 Spain €2.395bn 2.550 2.231
Jul 21 2022 France €3.285bn 0
Jul 21 2022 France €3.51bn 0.750
Jul 21 2022 France €3.701bn 0.750
Jul 21 2022 France (i) €415m 0.750
Jul 21 2022 France (€i) €768m 0.750
Jul 21 2022 France (€i) €310m 0.750
Jul 21 2022 UK £3.5bn 0.250
Source: IFR
International Financing Review July 23 2022 23
Those join the eight US dollar CPs that STERLING AROUNDû'ILTSûPLUSûHIGHû SûTOû BP ûBUTû
.$"ûHASûINKEDûSINCEûTHEûOUTBREAKûOFûTHEû EMPHASISEDûTHEûDIFlCULTYûOFûPRECISELYû
WAR ûTOTALLINGûCLOSEûTOû53 BN û4HEû#0SûDIDû BIG INTEREST IN IFFIM STERLING PRICINGûTHEûNICHEûISSUER ûWHICHûHASûFEWû
PROVIDEûSOMEûSIZE û4HEYûINCLUDEûAû53 BNû VACCINE BOND DIRECTûCOMPARABLES û(EûSAIDû)&&)MûISû
ZERO
COUPONû*UNEû ûPAPER generally 10bp back of the World Bank.
!MPLEûDEMANDûFORûVACCINEûBONDûEXPOSUREû
The bank also issued a Rmb7bn (US$1bn) and an effective pricing strategy were 'IVENû)&&)MûHASûNOTûBEENûINûTHEûSTERLINGû
Panda bond in May. more than enough to get the INTERNATIONAL MARKETûFORûMOREûTHANûAûDECADE ûITûDIDûTAKEû
FINANCE FACILITY FOR IMMUNISATION over the some work to explain the issuer to some
(EADQUARTEREDûINû3HANGHAI û.$"ûWASû line in sterling last Tuesday. INVESTORS ûTHEûLEADûSAID ûNOTINGûTHATûTHEREûISû
ESTABLISHEDûBYû"RAZIL û2USSIA û)NDIA û#HINAû little overlap between investors active in the
ANDû3OUTHû!FRICAûTOûMOBILISEûRESOURCESûFORû 4HEûSUPRANATIONALûSETTLEDûONûAûNO
GROWû sterling market and those buying in US
infrastructure and sustainable development a Mû*UNEû ûVACCINEûBONDûISSUEû DOLLARS ûWHEREû)&&)MûGETSûMOSTûOFûITSûFUNDING û
PROJECTSûINûTHEû"2)#3ûANDûOTHERûEMERGINGû FOLLOWINGûINVESTORûCALLS ûSTARTINGûATû)04SûOFû
and developing countries. BPûAREAûOVERû'ILTS û4HEûBONDûOFFERINGû /NûTOPûOFûTHEû%3'ûDRAW û)&&)MûWENTûTOû
TIGHTENEDûFROMûTHOSEû)04SûANDûWASûHEALTHILYû WHEREûTHEûINTERESTûLIES û4HEûSHORTûTHREE
YEARû
.$"ûHASûALREADYûTAKENûSOMEûACTIONSûTOû oversubscribed – both things that are far from MATURITYûISûhDElNITELYûWHEREûTHEûBULKvûOFû
REDUCEûITSûLINKSûWITHû2USSIA û)TûHASûFROZENû certain in a market that has tested bigger INVESTORSûARE ûTHEûSENIORûBANKERûAWAYûFROMû
all loan disbursements and new approvals names in recent months. Leads Barclays and THEûDEALûSAID ûh)T SûDIFlCULTûTOûGOûPASTûTHAT vû
in the country since March. The bank is TD Securities brought the deal in by 2bp after The lead agreed that the deepest pocket of
also expected to include a use of proceeds BOOKSûGREWûTOûMOREûTHANûa M STERLINGûDEMANDûISûAROUNDûTHEûTHREE
YEARû
clause in its future bond deals to specify point.
THATûNOûFUNDSûWILLûBEûUSEDûINû2USSIA û !ûLEADûPUTûFAIRûVALUEûATûAROUNDûPLUSû
said Fitch. BP ûADDINGûTHATûTHEûLEVELûINCLUDEDûhAû NO FLURRY
LITTLEûBITûOFûANûENTRANCEûPREMIUMvûnûTHEû )&&)M SûNEWûTRADEûBROKEûTHEûSILENCEûTHATûASSERTEDû
)NûADDITION ûAû3OUTHû!FRICANûDELEGATEûTOOKû name has not been in sterling since 2009. ITSELFûINûTHEûSTERLINGû33!ûMARKETûFORûFRESHû
over as chair of the board of directors on an #OMPARABLESûINCLUDEDûTHEû7ORLDû"ANK ûASû ISSUANCEûATûTHEûSTARTûOFû*ULY û)TûWASûTHEûMONTH Sû
INTERIMûBASISûINû-ARCH ûREPLACINGûTHEû WELLûASû!SIANû$EVELOPMENTû"ANKûANDû lRSTûFRESHûSTERLINGûBENCHMARK ûACCORDINGûTOû
Russian delegate who had been in the role .ORDICû)NVESTMENTû"ANKûPAPERûATûSIMILARû 2ElNITIVûDATA ûAûBREAKûINûTHEûPRIMARYûTRADINGû
SINCEûMID
û(OWEVER û2USSIAûWILLû TENORS ûHEûSAID PATTERNSûESTABLISHEDûINûTHEûPASTûTHREEûYEARS û
continue to have a position on the board and WHENûATûLEASTûAûHANDFULûOFû33!SûHAVEûACCESSEDû
to exercise its voting rights. h4HEûSTORY SûREALLYûRELEVANTûHERE vûSAIDû the space by this time in the month.
THEûLEAD ûh)FûITûHADN TûBEENûTHEM ûIFûITûHADû
ALL INTERNATIONAL US$ BONDS BEENûAûMOREûREGULARû33!ûBORROWERûTHATû !MIDûTHEûVOLATILEûSUMMERTIMEû
BOOKRUNNERS: 1/1/2022 TO DATE COMESûSIXûORûSEVENûTIMESûAûYEAR û)ûDON Tû CONDITIONS ûBANKERSûREPORTûTHATûTHEYûAREû
think they would have gotten the result currently spending their time preparing for
Managing No of Total Share THATûTHEYûDID vû(EûADDEDûTHATûhIT SûREALLYû THEûPOST
SUMMERûPRINTINGûRUSH
bank or group issues US$(m) (%) CHALLENGINGûATûTHEûMOMENTv
The lead said there had been a possibility
1 JP Morgan 395 130,624.28 10.4 0ROCEEDSûWILLûBEûUSEDûTOûhSUPPORTû'AVI Sû THEûCAPITALûMARKETSûCOULDûSEEûAûmURRYûOFû
mission to accelerate the development of activity after Thursday’s ECB meeting before
2 Citigroup 384 123,181.31 9.8 vaccines and access to immunisation in it settled down again ahead of this week’s
DEVELOPINGûCOUNTRIES ûINCLUDINGûACCESSûTOû ANNOUNCEMENTûFROMûTHEû&EDERALû2ESERVE û
3 Bank of America 390 120,306.27 9.6 #OVID
ûVACCINESûTHROUGHû#OVAXv ûTHEû although that did not prove to be the case.
MANDATEûREAD û4HEû'LOBALû!LLIANCEûFORû 3IMILARLY ûISSUERSûCOULDûTAKEûAûPUNTûAFTERûTHEû
4 Goldman Sachs 271 96,249.05 7.7 6ACCINESûANDû)MMUNISATIONûISûNOWûKNOWNû &EDûMEETING ûHEûSAID ûTHOUGHûAû"ANKûOFû
ASû'AVI ûTHEû6ACCINEû!LLIANCE û %NGLANDûMEETINGûINûEARLYû!UGUSTûPROVIDESû
5 Morgan Stanley 253 71,982.94 5.7 another event that could force investors’
Two bankers away from the deal said the heads down.
6 Barclays 250 53,484.90 4.3 initial level looked appropriate. One of
THEM ûAûSENIORûBANKER ûPUTûFAIRûVALUEûATû h9OUûMIGHTûlNDûONEûORûTWOûINVESTORSûTHATû
7 Wells Fargo 225 49,890.47 4.0 just want to reposition a little bit on each
PIECEûOFûNEWS ûBUTû)ûDON TûTHINKûYOU REûGOINGû
8 Credit Suisse 186 43,177.03 3.4 TOûGETû ûORû ûTHATûWILLûDRIVEûAûBIGûDEAL vûSAIDû
THEûLEAD ûh-AYBEûAûFEWûTAPS v
9 Deutsche Bank 193 43,111.39 3.4
NON-CORE CURRENCIES
10 HSBC 168 42,814.58 3.4
Total 1,299 1,253,228.36 WORLD BANK OPENS 2022
KAURI ACCOUNT
Including Euro, foreign and global issues. Excluding equity-related debt,
US Global ABS/MBS. The WORLD BANK ûRATEDû!AA !!!û
-OODY S 3 0 ûRAISEDû.: Mû 53 M û
Source: Refinitiv SDC code: O1 FROMûAûlVE
YEARûSUSTAINABLEûDEVELOPMENTû
Kauri bond offering on Wednesday via joint
ALL US DOLLAR FIXED-RATE GLOBALS ALL SOVEREIGN BONDS IN EUROS lead managers ANZ ûCBA and Westpac.
BOOKRUNNERS: 1/1/2022 TO DATE BOOKRUNNERS: 1/1/2022 TO DATE
4HEû û*ULYû û SûWEREûPRICEDûATû
Managing No of Total Share Managing No of Total Share ûFORûAûYIELDûOFû ûORû BPû
bank or group issues US$(m) (%) bank or group issues €(m) (%) WIDEûOFûMID
SWAPS
1 Bank of America 148 49,021.25 11.7 1 JP Morgan 23 15,257.58 12.2
2 Citigroup 118 43,371.34 10.4 2 BNP Paribas 19 12,087.82 9.6
3 JP Morgan 130 42,223.13 10.1 3 Barclays 17 11,088.51 8.8
4 Goldman Sachs 76 26,764.33 6.4 4 Deutsche Bank 15 9,838.24 7.8
5 Morgan Stanley 69 24,502.06 5.9 5 Citigroup 15 8,480.06 6.8
6 Wells Fargo 96 23,761.03 5.7 6 Credit Agricole 12 7,989.13 6.4
7 Barclays 52 17,118.68 4.1 7 Nomura 9 7,439.58 5.9
8 Deutsche Bank 43 16,649.20 4.0 8 Goldman Sachs 11 5,975.32 4.8
9 RBC 55 15,934.32 3.8 9 Societe Generale 7 5,786.70 4.6
10 HSBC 29 12,861.23 3.1 10 Morgan Stanley 9 5,610.47 4.5
250 417,891.33 40 125,404.49
Total Total
Excluding equity-related debt, ABS/MBS. SDC code: O5 Excluding ABS/MBS. SDC code: N4
Source: Refinitiv Source: Refinitiv
24 International Financing Review July 23 2022
BONDS CORPORATES
4HEûDEALûTAKESûYEAR
TO
DATEû+AURIûSUPPLYû h)ûBELIEVEûMARKETûINSTABILITYûDOESûHAVEûAû BANKSûCANûHOLDûTOûWITHSTANDû ûDAYSûOFûSEVEREû
TOû.: BNûVIAûNINEûTRANSACTIONSûFROMû LARGEûPARTûTOûPLAYûINûTHIS ûASûHISTORICALLYûWEû LIQUIDITYûSTRESSûINûORDERûTOûMEETû"ASELû)))ûRULES
SEVENûISSUERS ûONûCOURSEûTOûBEATûLASTûYEAR Sû have seen offshore engagement in the New
.: BNûRECORDûTHROUGHû ûDEALSûFROMû :EALANDûDOLLARûSPACEûDIMINISHûUNDERûPERIODSû !SSETûMANAGERSûANDûINSURANCEûCOMPANIESû
û33!S of heightened global volatility and 2022 has BOUGHTû ûOFûTHEûLATESTû4#ORPûTAP ûOFlCIALû
unfortunately produced more than its fair INSTITUTIONSû ûTRADINGûDESKSû ûANDû
“The Kauri market remains globally SHAREûOFûMARKETûUNCERTAINTY v hedge funds 7%.
COMPETITIVEûFORûBORROWERS ûWHILEûTHEû
SOVEREIGN ûSUPRANATIONALûANDûAGENCYûSECTORû Banks and bank treasuries picked up 79% 4OTALûORDERSûATûTHEûlNALûPRICEûWEREûALMOSTû
OFFERSûAûMEANINGFULûPICK
UPûFORûINVESTORSû OFûTHEûNEWûBONDS ûWITHûASSETûMANAGERS û ! BN ûWITHû ûALLOTTEDûTOû!USTRALIANûINVESTORS û
RELATIVEûTOûOTHERû.EWû:EALANDûHIGH
GRADEû pension funds and insurance companies ûTOûTHEû!MERICAS û ûTOû!SIAûANDû ûTOû%-%!
PAPER vûSAIDû$ESMONDû&ENNELL ûMANAGINGû allocated 21%.
director of capital markets and syndicate
ATû#"! û TCORP FIXED-RATE DEAL NETS A$1.5bn CORPORATES
4HEû7ORLDû"ANKûLASTûISSUEDûAûRECORD
NEW SOUTH WALES TREASURY CORPû !AA !! !!! û US DOLLARS
BREAKINGû.: BNûlVE
YEARûSUSTAINABLEû FOLLOWEDûUPûAû! BNû 53 BN ûSALEûOFû
DEVELOPMENTûBONDûOFFERINGûLASTû.OVEMBER û 3EPTEMBERû ûANDû!UGUSTû û IMPERIAL BRANDS LIGHTS UP MARKET
THOUGHû'LENû3ORENSEN ûDIRECTORûOFûDEBTû mOATING
RATEûNOTESûONû*UNEû ûWITHûAû
SYNDICATEûATû!.:û-ARKETSûINû.EWû:EALAND û ! BNûTAPûOFûITSû û-ARCHû û û IMPERIAL BRANDS hit the US bond market on
sees that trade “as the exception rather BENCHMARKûBONDûISSUE ûTAKINGûTHEû Wednesday with a rare offering from the
THANûTHEûEXPECTATIONv OUTSTANDINGûAMOUNTûTOû! BN û TOBACCOûSECTOR ûWHICHûHASûUNDERPERFORMEDû
the broader market amid concerns about
“While the environment does remain ANZ Bank of America ûUBS and Westpac were geopolitical and regulatory headwinds.
CHALLENGING ûTHISûIMPRESSIVEû.: Mû joint lead managers for the syndicated
result from the World Bank has boosted addition on Wednesday. The British tobacco company priced a
THEû+AURIûPRIMARYûMARKETûTOûAûRECORD
53 BNû ûLONGûlVE
YEARûSENIORû
SETTINGûPACEûFORû vû3ORENSENûSAID The reopening was priced at 80.70 to yield unsecured note offering at Treasuries plus
ûWITHINûTHEû BPn BPûGUIDANCEû BP ûSEEINGû BPûOFûPRICEûPROGRESSIONû
)NûRECENTûYEARS ûTHEû.EWû:EALANDûMARKETû RANGEûATû BPûOVERû%&0û
YEARûFUTURESû FROMûINITIALûMARKETING û!TûTHATûLEVEL ûTHEû
HASûBENElTEDûFROMûHIGHûOUTRIGHTûYIELDSû CONTRACT ûANDû BPûWIDEûOFûTHEû!PRILû û new notes became the highest coupon bond
that are attractive to international relative !#'" in its US dollar debt stack. Bank of America û
VALUEûINVESTORS û/Nû7EDNESDAY ûlVE
YEARû HSBC ûMizuho ûMUFG ûStandard Chartered and
GOVERNMENTûBONDSûRETURNEDû ûWHENû Bank balance sheets have a clear Wells FargoûARRANGEDûTHEûOFFERING ûWHICHû
lVE
YEARû53û4REASURIESûANDû!USTRALIANû PREFERENCEûFORûmOATING
RATEûNOTES ûASû ATTRACTEDû53 BNûOFûDEMAND ûACCORDINGûTOû
GOVERNMENTûBONDSûWEREûATû ûANDû underlined by their 97% allocation for last a source familiar with the trade.
ûRESPECTIVELY MONTH Sû4#ORPû&2.ûISSUANCE ûBUTûTHEYûSTILLû
TOOKûAûCHUNKYû ûOFûTHEûSTATEûFUNDINGû 4HEûDEAL SûSTRONGûPERFORMANCE ûDESPITEû
h)ûTHINKûYIELDûPICK
UPûMATTERSûBUTû)û ARM SûNEWûlXED
RATEûOFFERING û the issuer being a smaller and less familiar
suspect it is likely to be less of a focus for CREDITûINûTHEû53 ûWASûTAKENûASûAûPOSITIVEûSIGNû
investors in the context of higher overall This is well above their 29% allocation for for a market still struggling to gain
YIELDSûANDûHEIGHTENEDûVOLATILITY vû3ORENSENû THEû! BNûTAPûOFûTHEûSAMEûBONDûISSUEûINû CONlDENCE û"ANKERSûSAIDûTHEûSTRONGûAPPETITEû
TOLDû)&2 &EBRUARYû ûBEFOREûTHEû!USTRALIANû SHOWEDûTHAT ûASûLONGûASûDEALSûOFFEREDûPLENTYû
0RUDENTIALû2EGULATORYû!UTHORITYûANNOUNCEDû of additional yield over the secondary
.EWû:EALANDûINVESTORSûBOUGHTûAû the phasing out of banks’ use of the Reserve MARKET ûINVESTORSûWOULDûPARTICIPATEûINûNEWû
DOMINANTû ûOFûTHEûNEWûBONDS ûWITHû "ANKûOFû!USTRALIA SûCOMMITTEDûLIQUIDITYû issues. The concession for the new notes was
%-%!ûTAKINGû û!SIAû ûANDûTHEû!MERICASû facility by the end of 2022. ESTIMATEDûATû BP ûBASEDûONû)&2ûCALCULATIONS
1%.
4HEûREMOVALûOFûTHEû#,&ûLEAVESûSEMI
“Offshore participation in Kauri primary government paper as the highest yielding of the
has generally been lower in 2022 than FEWûREMAININGûELIGIBLEûASSETSû SOVEREIGNûBONDS û
WHATûWEûHAVEûSEENûINûPREVIOUSûYEARS vû AGENCYûBONDSûANDûCASHûHELDûATûTHEû2"! ûTHATû
Sorensen said.
ALL AGENCY BONDS IN EUROS ALL SUPRANATIONAL BONDS IN EUROS MUNICIPAL, CITY, STATE, PROVINCE ISSUES IN EUROS
BOOKRUNNERS: 1/1/2022 TO DATE BOOKRUNNERS: 1/1/2022 TO DATE BOOKRUNNERS: 1/1/2022 TO DATE
Managing No of Total Share Managing No of Total Share Managing No of Total Share
bank or group issues €(m) (%) bank or group issues €(m) (%) bank or group issues €(m) (%)
1 JP Morgan 24 8,819.95 10.1 1 Goldman Sachs 9 8,787.25 9.9 1 JP Morgan 10 3,384.92 11.2
2 BNP Paribas 24 8,695.86 10.0 2 JP Morgan 12 8,155.99 9.1 2 LBBW 12 2,232.61 7.4
3 Societe Generale 16 6,790.00 7.8 3 BNP Paribas 10 7,106.18 8.0 3 TD Securities 6 1,772.08 5.9
4 Barclays 14 6,562.55 7.5 4 Morgan Stanley 11 6,799.48 7.6 4 Deutsche Bank 9 1,769.37 5.9
5 HSBC 12 6,527.86 7.5 5 Credit Agricole 14 6,281.01 7.0 5 HSBC 9 1,761.00 5.8
6 Credit Agricole 18 5,591.15 6.4 6 UniCredit 4 5,834.71 6.5 6 DGZ-DekaBank 12 1,680.74 5.6
7 Deutsche Bank 13 5,504.18 6.3 7 Bank of America 10 5,738.73 6.4 7 Nord/LB 8 1,471.42 4.9
8 Bank of America 10 5,348.49 6.1 8 Deutsche Bank 9 5,696.44 6.4 8 Commerzbank 7 1,458.99 4.8
9 Citigroup 12 3,503.28 4.0 9 Citigroup 8 5,444.94 6.1 9 UniCredit 8 1,298.43 4.3
10 Goldman Sachs 8 3,477.32 4.0 10 Barclays 7 5,031.28 5.6 10 Barclays 4 1,235.49 4.1
92 87,299.62 50 89,200.49 38 30,211.70
Total Total Total
Excluding equity-related debt. Including publicly owned institutions. Excluding ABS/MBS. Excluding ABS/MBS.
Source: Refinitiv Source: Refinitiv
Source: Refinitiv SDC code: N6 SDC code: N5 SDC code: N7
International Financing Review July 23 2022 25
h7EûSAWûTHEû)MPERIALû"RANDSûNOTESûTRADEû “The investor base for that industry is #38ûBONDSûRALLIEDûAFTERûREPORTINGûSECOND
BPûTIGHTERûONûTHEûBREAK û)T SûONEûOFûTHOSEû DECLININGûAND ûASûSUCH ûITûMAKESûSENSEûTHATû QUARTERûEARNINGS û)TûSAIDû%BITDAûGREWû û
LESSûLIQUIDûNAMES ûWITHûLESSûVISIBILITY vûSAIDûAû when you have fewer buyers that will make the year over year despite contending with
banker away from the deal on Wednesday. FUNDINGûCOSTSûMOREûEXPENSIVEûOVERûTIME û!NDû supply chain disruptions and hiring
“There’s plenty of cash for a deal coming at that’s a negative technical for credit challenges.
ATTRACTIVEûLEVELS v PERFORMANCEûASûWELL vûSAIDûAûPORTFOLIOûMANAGER
#38 Sû û ûSENIORûNOTESûTIGHTENEDû
The capital raise is expected to fund a tender 3HE ûHOWEVER ûNOTEDûTHATû53ûBONDûBUYERSû BPûTOû BPûOVERû4REASURIESûONû4HURSDAY û
OFFERûFORûITSû53 BNû û ûSENIORûNOTES in general had fewer restrictions on owning ACCORDINGûTOû-ARKET!XESS
TOBACCO
RELATEDûBONDSûINûTHEIRûPORTFOLIOSû
)MPERIALû"RANDSûHASûBEENûANûINFREQUENTû compared with European investors. NON-CORE CURRENCIES
ISSUERûINûTHEû53ûCORPORATEûBONDûMARKET û
having last made a trip in the middle of )MPERIALû"RANDSûHASûBEENûFOCUSINGûONû JOHN DEERE REAPS SCARCITY REWARDS
û)NûFACT ûISSUANCEûFROMûTOBACCOû REDUCINGûITSûLEVERAGE ûCUTTINGûDOWNûITSûNETû
COMPANIESûHASûBEENûLIMITEDûTHISûYEAR ûWITHû DEBTûBYûa BNûTOûa BN ûACCORDINGûTOûAû-AYû 53ûFARMûEQUIPMENTûMAKERûJOHN DEERE !
"RITISHû!MERICANû4OBACCOûTHEûLASTûTOûPRINTûAû 17 earnings call. ! ! ûTOOKûADVANTAGEûOFûTHEûLACKûOFûRECENTû
US dollar bond in March. corporate supply with a well supported
CSX MARKS RETURNS ! Mû 53 M ûSALEûOFûTHREE
YEARû-4.Sû
2ATEDû"AA """ ûTHEûNEWûOFFERINGûHASûANû THATûMOREûTHANûRElNANCESûITSûRECENTLYû
ANNUALûCOUPONûSTEP
UPûOFû ûIFûEITHERû CSX provided the lone offering in the MATUREDû! Mû û*ULYû û ûNOTEû
Moody’s or S&P lowers its senior unsecured INVESTMENT
GRADEûCORPORATEûBONDûMARKETûONû issue.
CREDITûRATINGûTOûBELOWûINVESTMENT
GRADE 4HURSDAY ûCOMINGûFORûITSûlRSTûDEALûSINCEûLATEû
2020. Deutsche Bank and Standard Chartered were
The large order book stood out as the JOINTûLEADûMANAGERSûFORûTHEû û*ULYû û
broader tobacco industry faces worries The railway company issued a US$2bn S ûWHICHûWEREûPRICEDûONû7EDNESDAYûATû
AROUNDûAûPOTENTIALû&$!ûBANûONûMENTHOLû THREE
PARTûSENIORûUNSECUREDûNOTE ûLEDûBYû ûTOûYIELDû ûINSIDEû BPûAREAû
CIGARETTESûINûTHEû53 û)NûADDITION ûMANYû Bank of America ûBarclays ûCitigroup ûMorgan GUIDANCEûATûASSETûSWAPSûPLUSû BP
multinational tobacco producers have Stanley and UBS.
UNWOUNDûTHEIRûBUSINESSESûINû2USSIA ûONEûOFû 4HEûISSUERûPREVIOUSLYûRAISEDû! MûFROMû
the world’s largest cigarette markets. !û53 Mû
YEARûLANDEDûATû BPûOVERû Aû ûlVE
YEARûBONDûOFFERINGûINû3EPTEMBERû
4REASURIESûANDûAû53 Mû
YEARûATû BPû 2019.
Tobacco issuers have underperformed the over. There was also a US$150m tap of the
BROADERûINVESTMENT
GRADEûCORPORATEûBONDû û ûSENIORûNOTESûTHATûCAMEûINûATû UOM MARKETS FIRST GREEN BOND
INDEXûBYûAROUNDû BPûTHISûMONTH ûACCORDINGû BPûOVERû4REASURIES û$RAWINGû53 BNûOFû
TOû)#%û"OF!ûDATA DEMAND ûTHEû"AA """ ûRATEDûOFFERINGû The UNIVERSITY OF MELBOURNE ûRATEDû!! û 3 0 û
tightened 20bp–25bp from initial held investor calls last week arranged by
ALL US INVESTMENT GRADE CORPORATE DEBT marketing. joint lead managers CBA and HSBC for a
BOOKRUNNERS: 1/1/2022 TO DATE POTENTIALûSEVEN
YEARûORûLONGERû!USTRALIANû
CreditSights estimated fair value at dollar senior unsecured green bond offering.
Managing No of Total Share 4REASURIESûPLUSû BP û BP ûANDû BP û
bank or group issues US$(m) (%) respectively. HSBC is sole green bond structuring agent
FORûTHEûlRSTûBONDûISSUEûUNDERûTHEû
1 JP Morgan 256 103,077.75 12.8 Though the offering was set aside for UNIVERSITY SûSUSTAINABILITYûlNANCINGû
2 Bank of America 262 102,687.79 12.7 GENERALûCORPORATEûPURPOSES ûAûLARGEûPORTIONû FRAMEWORK ûWHICHûHASûRECEIVEDûAûSECOND
3 Citigroup 211 78,472.38 9.7 is ultimately expected to go towards PARTYûOPINIONûFROMû$.6û"USINESSû!SSURANCEû
4 Goldman Sachs 144 68,641.09 8.5 shareholder payments. CSX has carried out !USTRALIA
5 Morgan Stanley 151 54,052.78 6.7 OVERû53 BNûOFûSHAREûBUYBACKSûTHISûYEAR û
6 Wells Fargo 150 49,745.12 6.2 according to an earnings call on Wednesday. UOM debuted in the domestic bond
7 Barclays MARKETûINû*UNEû ûWITHûAû! Mû
8 HSBC 97 27,488.24 3.4 “We should expect the company to (US$170m at the current exchange rate)
9 MUFG 69 27,068.57 3.4 continue to be aggressive on shareholder ûSEVEN
YEARûNOTEûOFFERING ûBEFOREûSELLINGû
10 Deutsche Bank 95 25,978.18 3.2 REWARDS ûANDûWEûEXPECTûTHEûVASTûMAJORITYûOFû ! MûOFû
YEARûBONDSûINû$ECEMBERû û
73 22,089.16 2.7 this issuance will go towards share )TûMADEûITSûTHIRDûBONDûISSUEûINû*ANUARYû û
Total 529 805,685.10 REPURCHASES vûSAIDû#REDIT3IGHTSûANALYSTS WITHû! MûOFû û
YEARû-4.S
Source: Refinitiv SDC code: F9 FIG
ALL INVESTMENT-GRADE BONDS IN EUROS ALL CORPORATE BONDS IN EUROS US DOLLARS
BOOKRUNNERS: 1/1/2022 TO DATE BOOKRUNNERS: 1/1/2022 TO DATE
BANK OF AMERICA TAKES SIZE
Managing No of Total Share Managing No of Total Share
bank or group issues €(m) (%) bank or group issues €(m) (%) BANK OF AMERICA SQUEEZEDûSIZEûOUTûOFûTHEû
MARKETûONû4UESDAY ûFOLLOWINGûINûTHEû
1 BNP Paribas 199 58,767.81 8.6 1 BNP Paribas 81 12,477.89 7.5 FOOTSTEPSûOFûMONEY
CENTREûBANKSû7ELLSû
2 JP Morgan 153 51,315.35 7.5 2 Deutsche Bank 55 10,567.19 6.4 &ARGOûANDû*0û-ORGAN
3 Deutsche Bank 138 40,081.86 5.9 3 HSBC 58 10,249.31 6.2
4 Credit Agricole 139 38,223.44 5.6 4 JP Morgan 50 9,166.25 5.5
5 Barclays 112 37,136.90 5.4 5 Societe Generale 51 8,552.35 5.2
6 HSBC 142 36,359.69 5.3 6 Barclays 42 7,714.45 4.7
7 Societe Generale 130 35,800.38 5.2 7 Bank of America 39 7,668.63 4.6
8 Citigroup 99 27,615.65 4.0 8 UniCredit 44 7,156.42 4.3
9 Bank of America 89 27,477.88 4.0 9 Goldman Sachs 37 6,739.09 4.1
10 Goldman Sachs 73 27,017.92 3.9 10 Santander 39 6,479.08 3.9
677 684,917.00 207 165,767.11
Total Total
Excluding ABS/MBS, equity-related debt. SDC code: N9 Excluding equity-related debt. FIGs, ABS/MBS. SDC code: N8
Source: Refinitiv Source: Refinitiv
26 International Financing Review July 23 2022
BONDS FIG
4HEû#HARLOTTE û.ORTHû#AROLINA
BASEDû MORGAN STANLEY ûWELLS FARGO and JP MORGAN SOMEûSENSEûTOûADDûPOTENTIALûYIELD û(IGH
LENDERûISSUEDûAû53 BNûTHREE
PARTûSENIORû CHASE printed bonds after all three reported QUALITYûBANKûPAPERûISûONEûEXAMPLE û9OUû
UNSECUREDûlXED
TO
mOATINGûNOTEûOFFERING û SECOND
QUARTERûRESULTSûTHATûFELLûSHORTûOFû COULDûSEEûONEûANDûAûHALF ûEVENûTWOû
RATEDû! !n !! û4HEûBANKûDROPPEDûAû analyst expectations. Market participants PERCENTAGEûPOINTSûABOVEûAû4REASURYûYIELD vû
PROPOSEDûFOUR
YEARûmOATER nonetheless still consider these lenders – SAIDû$ANû)VASCYN û0IMCO SûGROUPûCHIEFû
and the US banking sector as a whole – to be INVESTMENTûOFlCER ûINûAûBLOGPOSTûFROMû
4HEû53 BNûFOUR
YEARûNON
CALLûTHREE û particularly robust in the face of an *ULYû
53 BNûSIX
YEARûNON
CALLûlVEûANDû53 BNû economic downturn.
YEARûNON
CALLû ûCAMEûINûATû BP û BPû 4HEûINCLUSIONûOFûLONGER
DATEDûMATURITIESû
ANDû BPûOVERû4REASURIES ûRESPECTIVELY û4HEû The Federal Reserve found in its latest in last Monday’s batch of offerings also
SHORTER
DATEDûFOUR
YEARûTRANCHEûTIGHTENEDû annual stress test that banks could still indicated the market for extended tenors
BPûFROMûPRICEûTHOUGHTS ûWHILEûTHEûLONGER
extend lending to households and WASûOPEN û4HEû
YEARû4REASURYûYIELDû
DATEDû
YEARûPORTIONûCAMEûINû BP businesses even after suffering from severe ENDEDûATû ûLASTû-ONDAY ûDOWNûFROMûANû
losses.
YEARûHIGHûOFû ûINûMID
*UNE
Those spreads still yielded concessions of
more than 5bp versus secondary market h!FTERûTHEû&ED SûSTRESSûTEST ûPEOPLEûVIEWû53û -ONEYûCENTREûBANKSû7ELLSû&ARGOûANDû*0û
LEVELS ûFROMûAûBORROWERûTHATûISûALREADYû banks as pretty secured and are willing to -ORGANû#HASEûBOTHûSOLDûSIX
YEARûNON
CALLû
TRADINGûSLIGHTLYûWIDERûTHANûITSû53ûPEERS û BUYûTHEûRISK û!NDûTHOSEûYIELDSûAREûUPûTOOûANDû lVEûANDû
YEARûNON
CALLû ûNOTES ûRAISINGû
according to CreditSights people are able to get higher yields than a 53 BNûTOGETHER
YEARûAGO vûSAIDû3TANû3HIPLEY ûSTRATEGISTûATû
The new notes represented a “good %VERCOREû)3) û 7ELLSû&ARGOûLANDEDûITSû53 BNûSIX
YEARû
opportunity to pick up concession on top of ANDû53 BNû
YEARûATû BPûANDû BPû
THATûSPREADûVALUEv ûTHEûRESEARCHûCOMPANYûSAID Morgan Stanley came out with an offering OVERû4REASURIES ûWITHûBOTHûTRANCHESûSEEINGû
OFûlXED
TO
mOATINGûRATEûSENIORûNOTES û around 25bp of price progression.
!Tû53 BN ûTHEûTHREE
PARTûISSUEû INCLUDINGûAû53 BNûFOUR
YEARûNON
CALLûTHREEû -EANWHILE û*0û-ORGANûPRICEDûITSû53 BNû
represented the largest of the week’s bond ANDûAû53 BNû
YEARûNON
CALLû û)TûPRINTEDû SIX
YEARûATû BPûOVERû4REASURIESûANDûITSû
deals from the big US banks and also the the notes at Treasuries plus 152bp and 53 BNû
YEARûATû BPûOVER
biggest senior unsecured bond offering from BP ûRESPECTIVELY ûWITHûEACHûPORTIONû
"ANKûOFû!MERICAûTHISûYEAR û7ELLSû&ARGOûANDû TIGHTENINGû BPûFROMûPRICEûTHOUGHTS NATIONWIDE RAISES US$850m
*0û-ORGANûRAISEDû53 BNûFROMûTHEIRûBONDû FROM YANKEE BOND
sales last Monday. 2ATEDû! !n ! ûTHEûBANKûHASûISSUEDû
US$15.5bn of senior unsecured bonds this NATIONWIDE BUILDING SOCIETY PRINTEDûAû ! 2EGû
"ANKûOFû!MERICAûHASûALREADYûBEENûAû YEAR ûACCORDINGûTOû)&2ûDATA 3ûTRANSACTIONûONû7EDNESDAY ûINûAûSESSIONû
PROLIlCûBORROWERûTHISûYEAR ûHAVINGûPRINTEDû dominated by Yankee bond supply as
NEARLYû53 BNûINûSENIORûUNSECUREDûBONDS û 7ITHûTHEûBANK SûlXED
INCOMEûTRADINGû overseas borrowers followed in the
ACCORDINGûTOû)&2ûDATA REVENUESûSTILLûSHOWINGûRAPIDûYEAR
OVER
YEARû slipstream of bond deals from the big US
GROWTHûINûTHEûSECONDûQUARTER ûTHEûTIMINGûOFû banks.
h)T SûPRETTYûOPPORTUNISTICûFROMûTHEûBANKSû Morgan Stanley’s bond deal could indicate
to tap the market before the broader the investment bank sees opportunities for The UK banking cooperative printed a
CORPORATESûCOMEûIN vûSAIDû3COTTû+IMBALL û GROWTHûINûITSûTRADINGûDIVISION ûSAIDû 53 MûlVE
YEARûSENIORûPREFERREDûNOTEû
MANAGINGûDIRECTORûATû,OOPû#APITALû!SSETû CreditSights analysts. ISSUEûATû4REASURIESûPLUSû BP ûTIGHTENINGû
Management. ITûBYû BPûFROMûPRICEûTHOUGHTS û4HEû! !
They noted that Morgan Stanley was ! ûRATEDûOFFERINGûWASûLEDûBYûBank of
“There is a lot of cash out there that AMONGûTHEûBETTERûCAPITALISEDûBANKS ûGIVENûITSû America ûGoldman Sachs ûJP Morgan and
would have been put aside for new issuance. #%4 ûRATIOûSTOODûATû ûWELLûABOVEû Morgan Stanley.
The market slowed down for various REGULATORYûREQUIREMENTS
REASONSûINûTHEûLASTûFEWûWEEKS ûBUTûWITHûITû Nationwide has been active in debt
NOWûBEINGûREOPENED ûSOMEûOFûTHATûCASHûCANû BALANCE SHEET STRENGTH CAPITALûMARKETSûINû*ULY ûHAVINGûISSUEDû
BEûDEPLOYED vûSAIDû+IMBALL Large money managers have spoken of the covered bonds in sterling and Swiss francs.
ATTRACTIVENESSûOFûHIGH
QUALITYûBANKûPAPERûASû )TûALSOûPRINTEDûAûSENIORûNON
PREFERREDûBONDû
-ONEYûMANAGERS ûINCLUDINGû0IMCO ûHAVEû lNANCIALûBALANCEûSHEETSûREMAINûSTRONG OFFERINGûINû53ûDOLLARSûINû&EBRUARY ûGRABBINGû
recently commented on the attractive 53 BNûOFûFUNDINGûFROMûAûTWO
PARTûDEAL
VALUATIONSûPRESENTEDûBYûHIGH
QUALITYûBANKû h)NûTHEûINVESTMENT
GRADEûSPACE ûTHEû
PAPERûAFTERûHEAVYûlNANCIALûISSUANCEûEARLIERû HIGHER
QUALITYûAREASûOFûTHEûMARKETûMAKEû
in the year widened their spreads.
ALL FINANCIAL INSTITUTION BONDS IN EUROS ALL SUBORDINATED FINANCIAL INSTITUTION
BNY MELLON and US BANCORP were also in the BOOKRUNNERS: 1/1/2022 TO DATE
market on Tuesday. BNY priced its BONDS (ALL CURRENCIES)
53 BNûFOUR
YEARûANDû53 MûEIGHT
Managing No of Total Share BOOKRUNNERS: 1/1/2022 TO DATE
YEARûlXED
TO
mOATINGûTENORSûATû4REASURIESû bank or group issues €(m) (%)
PLUSû BPûANDû BP ûRESPECTIVELY Managing No of Total Share
1 BNP Paribas 45 12,419.80 10.4 bank or group issues US$(m) (%)
-EANWHILE û53û"ANCORPûRAISEDû53 BNû 2 HSBC 39 8,683.18 7.3
FROMûAûSIX
YEARûNON
CALLûlVEûSENIORû 3 Deutsche Bank 38 7,418.40 6.2 1 Bank of America 16 4,825.12 8.4
UNSECUREDûlXED
TO
mOATINGûNOTEûANDûANû
2 HSBC 20 4,823.24 8.4
YEARûNON
CALLû ûSUBORDINATEDû 4 Credit Agricole 23 7,180.69 6.0 3 BNP Paribas 18 4,077.66 7.1
lXED
TO
mOATINGûNOTE 4 Citigroup 28 4,061.22 7.0
5 JP Morgan 33 6,835.84 5.7 5 Barclays 17 3,779.63 6.6
BIG US BANKS HIT BOND PRIMARY 6 Deutsche Bank 12 3,720.36 6.5
6 Natixis 26 6,078.25 5.1 7 Morgan Stanley 22 3,336.07 5.8
The big US banks hit the market in force last 8 UBS 15 3,229.89 5.6
Monday in a sign that investors still see 7 Societe Generale 39 6,046.24 5.1 9 JP Morgan 19 3,059.30 5.3
these issuers as among the most resilient in 10 Credit Suisse 11 2,656.49 4.6
THEûCOUNTRY SûDEBTûMARKETS ûEVENûAFTERûTHEYû 8 Citigroup 29 4,091.77 3.4 86 57,672.43
reported lacklustre earnings. Total
9 UniCredit 17 4,042.69 3.4
10 Barclays 25 3,883.54 3.3
Total 166 119,273.65
Including banks, insurance companies and finance companies. Excluding
equity-related and covered bonds. Excluding publicly owned institutions.
Source: Refinitiv SDC code: N11 Source: Refinitiv SDC code: J3a
International Financing Review July 23 2022 27
-ANYûOFûTHEûBIGûBANKûOFFERINGS ûISSUEDûATû h)ûWOULDûSEEû.ATIONWIDEûASûNOTûBEINGûINû Nationwide drew an order book of
THEûSTARTûOFûLASTûWEEK ûTRADEDûTIGHTERûONûTHEû THEûMARKETûWHEELHOUSEûRIGHTûNOW vûSAIDûAû 53 BN ûACCORDINGûTOûAûSOURCEûFAMILIARû
BREAK ûOPENINGûUPûAûWINDOWûFORûOTHERû banker away from the deal. with the matter.
lNANCIALûISSUERS û"UTûTHEûSMALLERûSIZEûANDû
THEû !ûDESIGNATIONûOFûTHEû.ATIONWIDEûDEALû Leads brought the offering’s concession “That’s in the general ballpark of how
may have put off investors that were drawn OVERûTHEûSECONDARYûMARKETûDOWNûTOû BP û deals were getting done in the last few
TOWARDSûISSUESûWITHûMOREûLIQUIDITY BASEDûONû)&2ûCALCULATIONS û/NEûOFûTHEûLESSû weeks but more than others were paying
SUBSCRIBEDûDEALSûONû7EDNESDAY û THISûWEEK vûSAIDûTHEûBANKER ûESTIMATINGû
TD’s global spree adds to
Canadian issuance surge
FINANCIALS Major currency issuance already well in excess of 2021 total
Canadian banks’ relentless bond issuance may do a covered. This is a logical response to a “We’re very pleased with the response,” said
continues apace, with another flurry of highly difficult environment.” a banker at one of the leads on Wednesday.
sought-after covered bonds from TORONTO- “We had one eye on the ECB meeting tomorrow
DOMINION and BANK OF MONTREAL showing that Aside from issuing TLAC-eligible senior debt and so couldn’t be entirely sure how prepared
the country’s lenders can still take hefty sizes out to meet regulatory requirements, Canadian investors would be to step up today. But the
of foreign currency markets. banks are also said to be looking to get funding backdrop feels very favourable across asset
onboard to finance strong growth in assets and classes and, having seen the results of the
Toronto-Dominion neatly demonstrated to compensate for potential deposit outflows, two [euro covered] deals this week, we felt a
Canadian issuers’ prolific approach in a which could eat into the deposit growth seen shorter maturity like a three-year should be well
midsummer covered bond funding dash that during Covid-19 lockdowns. received, even with the ECB tomorrow.”
spanned three different currencies across
Tuesday and Wednesday, after Bank of Montreal M&A is another factor. Bank of Montreal and The deal was notably TD’s second €2.5bn
took a healthy US$2.5bn out of the market on Toronto-Dominion have accelerated their growth covered of the year, following a five-year
Monday. with their respective acquisitions of Bank of the transaction in March.
West and First Horizon, adding to their funding
A rebound in issuance was expected after the requirements, said bankers. Attractive spreads relative to core European
disruption of the coronavirus pandemic. Like issuers in combination with favourable
peers around the globe, Canadian banks loaded The rise in covered bond issuance can also be regulatory treatment – Canadian banks’ euro
up on the emergency liquidity made available by chalked up to a high volume of redemptions. In covereds are eligible for ECB repo – mean
their central bank in 2020, issuing huge volumes 2022, C$62bn of Canadian covereds will mature, issuers can likely count on investors’ continued
of retained covered bonds to use as collateral. followed by C$63bn in 2023, the most in a given support, said bankers.
But Canada’s central bank was one of the first year, according to Fitch.
to start rolling back support – announcing that “We did some investor work earlier in the year
it would no longer accept own-issued covered Those heavy redemptions partly explain the at a time when the Canadians were very active,
bonds as collateral as early as October 2020 – ability of Canadian banks to repeatedly take and a couple of accounts told us they were
putting the country’s banks at the forefront of unusually large sizes out of the market. approaching line limits. But then one Canadian
the return to a more normal course of business. came with a fairly cheap deal and suddenly lines
In January, Bank of Montreal, for example, appeared,” said a third banker.
But, even taking that into account, the amounts priced the biggest euro covered bond since the
raised by Canada’s banks in the major currency global financial crisis, landing a €2.75bn five- “It can’t continue ad infinitum, but if you’re
bond markets this year are historically high. year, while, last October, Bank of Nova Scotia offering these kind of concessions on three-year
printed the largest single-tranche covered bond paper, people will make room.”
Canadian banks have issued US$80.7bn- on record, a US$3.5bn five-year.
equivalent (C$104bn) in the US dollar, euro and On the same day as its euro transaction, TD
sterling bond markets year to date, according FLIGHT TO QUALITY raised A$2.4bn from a dual tranche fixed and
to IFR data. That is already well in excess of In spite of the volume and frequency of their floating rate three-year offering (see separate
the total volumes issued in each of the last five issuance, investors still have plenty of appetite. story).
years, surpassing the US$60.1bn issued in the
whole of 2021. “When there’s disruption in global markets, On Tuesday, TD printed a US$2bn three-year
there’s a flight to quality,” said Susan covered, following in the footsteps of BMO,
Bankers said the rise in public issuance Hosterman, senior director at Fitch. which landed a US$2.5bn three-year on Monday.
partly reflected Canadian banks’ proactive Both deals were priced at 79bp over SOFR mid-
approach to obtaining funding, optimising “In those times, investors almost always look swaps.
liquidity and progressing their TLAC issuance to Canada for covered bond issuance. They’re
plans, in anticipation of a potential downturn very strong and well-regulated banks. Their Bankers close to the 144A-registered deals
in market and economic conditions as well as legislative covered bond programme is one of said both found good traction from European
high volumes of competing issuance after the the strongest programmes globally.” and Asian accounts before going on to price in
summer. the US session.
TD’s euro offering on Wednesday garnered more
“Bank treasurers are looking at all the than €3.25bn of orders, allowing leads Danske “Coming after BMO had just taken €2.5bn out
options,” said a syndicate banker. “If you need Bank, DZ Bank, ING, Natixis, TD Securities and of the market – BMO has already had two fairly
regulatory capital, you need to do a TLAC. UniCredit to set the size at €2.5bn while tightening large redemptions this year as well – it was not
Otherwise, if you just need liquidity, then you the spread 3bp from initial guidance to a 17bp a surprise to see a lower volume on the second
landing point. At that level, the deal offered a trade,” said one.
pick-up of around 12bp over the secondary market. Tom Revell, Sunny Oh
28 International Financing Review July 23 2022
BONDS FIG
CONCESSIONSûFORûRECENTûHIGH
GRADEûBONDû !NOTHERûCONSIDERATIONûWASûTHEûPOTENTIALû continued on that trajectory over the course
sales were in the range of 10bp to 15bp last HEADWINDSûFACINGûTHEû'ERMANûECONOMYûINû OFûTHEûDAY û'IVENûAûLACKûOFûLIQUIDITY ûSOMEû
week. THEûSECONDûHALFûOFû ûASûHIGHLIGHTEDûBYû BANKERSûALSOûQUESTIONEDûWHETHERûQUOTESûFORû
CONCERNûOVERûTHEûPROSPECTûTHATûGASûmOWû RELATIVELYûOFF
THE
RUNûNAMESûSUCHûASû!AREALû
Other Yankee issuers that came to through Russia’s Nord Stream 1 pipeline are representative of true clearing levels.
market on Wednesday included Bank may not restart after maintenance ends on
,EUMI û.44 û,ENOVOûANDû)MPERIALû"RANDS Thursday. “We saw some accounts looking to make
ROOMû;FORûTHEûNEWûISSUE= ûANDûLIQUIDITYûINûTHEû
EUROS h)T SûALLûABOUTûTHEûLEASTûWORSTûOPTION vûSAIDû SECONDARYûMARKETûISûNOTûGREAT vûSAIDûTHEûLEADû
the lead banker. “The market was slightly banker. “You have to be relatively pragmatic.
AAREAL PAYS HIGH COST TO SWERVE wider and softer today in macro but cash You have a theoretical screen level that says
POST-SUMMER RISKS WASûBASICALLYûUNCHANGED ûSOûAFTERûGETTINGû 8ûBUTûTHEûREALITYûISûDIFFERENT v
good feedback and good engagement they
Faced with a choice between paying a high decided they’d rather get this done now US BANKS AWAITED
COSTûOFûADMISSIONûTOûANûILLIQUIDûYETûEMPTYû THANûPUTûSOMETHINGûONûTHEûDOCKETûFORûPOST
$ESPITEûTHEûMODESTûDEMANDûFORû!AREAL Sû
market or taking its chances in the busy SUMMER v TRADE ûBANKERSûSAIDûTHEûPRIMARYûMARKETûWASû
POST
SUMMERûPERIODûAGAINSTûANûUNCERTAINû still in relatively good shape and would be
ECONOMICûBACKDROP û'ERMANY SûAAREAL Leads BNP Paribas ûCitigroup ûDekaBank û RECEPTIVEûTOûTRADESûFROMûLARGE ûTOP
TIERû
BANK opted for what it deemed to be the Deutsche Bank ûDZ Bank and HSBC opened credits.
LEASTûWORSTûOPTIONûLASTû4UESDAY ûOFFERINGû BOOKSûFORûTHEûõ MûNO
GROWûTRANSACTIONû
INVESTORSûANûEYE
CATCHINGû BPûSPREADûTOû WITHûINITIALûPRICEûTHOUGHTSûOFûTHEûMID
SWAPSû Such supply could soon be forthcoming
LANDûAûõ MûTHREE
YEARûGREENûSENIORû PLUSû BPûAREA û FROMûTHEû53ûBANKS ûFOLLOWINGûTHEû
preferred transaction. PUBLICATIONûOFûTHEIRûSECOND
QUARTERûRESULTSû
!FTERûJUSTûUNDERûTWOûHOURS ûTHEûLEADSû and a wave of US dollar transactions.
New euro senior unsecured paper has announced that books had passed €500m.
BEENûINûSHORTûSUPPLYûINûTHEû&)'ûSPACEûOVERû (OWEVER ûBANKERSûSAIDûTHEREûAREûUNLIKELYû
the past few weeks as activity has slowed h4HREEûHUNDREDûBASISûPOINTSûFORûANû!û to be huge volumes of reverse Yankee
into the summer holiday season. Observers RATEDûTHREE
YEARûISûSOMETHINGûTHAT SûGOTûTOûBEû SUPPLY ûGIVENû53ûBANKSûWOULDûLIKELYûHAVEûTOû
were therefore surprised by the emergence ATTRACTIVEûFORûMOSTûPEOPLE ûBUTûTHEûlRSTûBOOKû pay materially higher premiums than the
OFû!AREALûONû-ONDAYûASûTHEû'ERMANûLENDERû UPDATEûWASûSLIGHTLYûUNDERWHELMING vûSAIDûAû 5bp–10bp offered by the senior transactions
announced its mandate and held investor SECONDûBANKERûAWAYûFROMûTHEûDEAL ûh%QUALLY û recently priced by the likes of Morgan
calls to market what would be its second we are in the summer period and trades are 3TANLEY û*0û-ORGANûANDû7ELLSû&ARGO û
green senior unsecured issuance. GOINGûSLOWERûGENERALLY ûWEûSTILLûHAVEûLOWû
LIQUIDITYûANDûPLENTYûOFûVOLATILITY û!ND ûIFûYOUû h%VENûASSUMINGûANûEXCEPTIONALûOUTCOME û
"ANKERSûSAIDûTHEûDEAL SûEXPECTEDû! !nû LOOKûATû!AREAL SûBONDSûRELATIVEûTOûPEERSûSUCHû those premiums are not replicable in the
(Moody’s/Fitch) ratings and core European ASûPBB ûTHEREûISûSOMEûUNDERPERFORMANCEû EUROûMARKETû û û û)ûWOULDûBEûSURPRISEDûIFûWEû
PROVENANCEûBELIEDûITSûDIFlCULTY û4HEYûSAIDû THERE vû did not see any [US supply] but it is not an
the deal would not be an easy sell given OBVIOUSûTRADEûTOûDO vûSAIDûAûFOURTHûBANKER û
THEûLENDER SûRELATIVELYûSMALLûSIZE ûITSûFOCUSû With demand coming in above €725m
on real estate and its takeover by a private INCLUDINGûõ Mû*,-ûINTEREST ûTHEû*ULYû û 4HEûONLYûEURO
DENOMINATEDûBANKûSENIORû
EQUITY
LEDûCONSORTIUM û!FTERûAûPROTRACTEDû DEALûWASûLAUNCHEDûATû BP û trades since the turn of the month have
PROCESS ûTHEûBANK SûSHAREHOLDERSûAPPROVEDû COMEûINûTHEûFORMûOFûSUB
BENCHMARKû
a buyout by a group of investors led by US THEORY VERSUS REALITY? offerings from EM lenders OTP Bank and
lRMSû!DVENTû)NTERNATIONALûANDû %XTRAPOLATINGûFROMû!AREAL SûSENIORûPREFERREDû Nova Ljubljanska banka.
Centerbridge Partners in May. CURVE ûBANKERSûSAWûTHEûDEAL SûFAIRûVALUEû
somewhere between 200bp and 210bp h5NFORTUNATELY ûALLûTHEûRECENTûDATAûPOINTSû
“The timing is extremely odd – this is when the mandate was announced on out of the euro [senior unsecured] market
not an easy credit despite the ratings -ONDAY ûWHICHûWOULDûTRANSLATEûTOûAûNEWû HAVEûNOTûBEENûENCOURAGING ûFORûDIFFERENTû
because of its commercial real estate book issue premium of up to 100bp. REASONS vûSAIDûTHEûlRSTûBANKER
EXPOSUREûANDûPRIVATEûEQUITYûOWNERSHIP vû
said a banker away from the deal. (OWEVER û!AREAL SûSECONDARIESûHADû h!LLûHAVEûCOMEûFROMûNON
FREQUENTûISSUERS û
widened by 20bp–25bp by Tuesday morning NOTûFROMûBLUEûCHIPûORûVERYûHIGH
QUALITYû
“You could argue it looks like a sign of ASûINVESTORSûPREPAREDûFORûTHEûNEWûISSUE ûANDû ISSUERS ûANDûALLûHAVEûINSISTEDûONûSHORT
DATEDû
desperation. Or it shows the funding team SENIORûPREFERRED ûWHICHûWEûKNOWûINVESTORSû
has a strong view that things might get
WORSEûINûTHEûSECONDûHALF v ALL GLOBAL AND EUROMARKET YEN BONDS ALL INTERNATIONAL YEN BONDS
BOOKRUNNERS: 1/1/2022 TO DATE BOOKRUNNERS: 1/1/2022 TO DATE
)NDEED ûAûLEADûBANKERûSAIDû!AREALûHADû
weighed up whether to make its move Managing No of Total Share Managing No of Total Share
NOWûORûPOST
SUMMER û bank or group issues ¥(m) (%) bank or group issues ¥(m) (%)
h)TûISûAûDEBATEûMANYûISSUERSûAREûHAVING û 1 Nomura 8 129,125.00 34.1 1 Nomura 23 251,441.67 24.1
We’ve not seen supply for a couple of 2 Mizuho 2 57,958.33 15.3 2 Sumitomo Mitsui 14 220,225.00 21.1
weeks and obviously some issuers would 3 Sumitomo Mitsui 4 47,625.00 12.6 3 Mizuho 17 180,275.00 17.3
have come if the market had been in better 4 Mitsubishi UFJ MS 11 149,141.67 14.3
SHAPE vûHEûSAID û 4 Bank of America 1 42,833.33 11.3 5 Daiwa Securities 15 96,450.00 9.2
=4 JP Morgan 1 42,833.33 11.3 6 Bank of America
“That means you start to get the sense 6 Mitsubishi UFJ MS 1 15,125.00 4.0 =6 JP Morgan 1 42,833.33 4.1
THATûPOST
SUMMERûWILLûBEûCONGESTED û 1 12,500.00 3.3 8 Natixis 1 42,833.33 4.1
including with bigger names that will be 7 Daiwa Securities 1 12,500.00 3.3 9 Societe Generale 5 28,600.00 2.7
QUITEûSOUGHT
AFTERûGIVENûWHEREûCREDITû =7 Societe Generale 1 2,500.00 0.7 10 China Construction 1 12,500.00 1.2
SPREADSûANDûALL
INûYIELDSûARE v 9 Bank of China 1 2,500.00 0.7 1 2,500.00 0.2
=9 China Construction 15 379,000.00 Total 40 1,042,800.00
Total
Excluding equity-related debt. Including preferreds. Including all Euro, foreign and global issues. Excluding equity-related
debt.
Source: Refinitiv SDC code: K10 Source: Refinitiv SDC code: K12
International Financing Review July 23 2022 29
AREûFULLûOF û)TûISûBECOMINGûTHEûNORMûFORûTHESEû (OWEVER ûFORûAûSECONDûBANKER û,""7ûLEFTûAû “Forecasts from various research expect
FORCEDûORûSMALLERûISSUERS ûBUTûTHEûMARKETû minimal concession of about 1bp. that the biggest volumes have been done
feels better than these data points are telling YEAR
TO
DATEûANDûTHATûAFTERûTHEûDIRECTIVE Sû
US ûSOû)ûWOULDûBEûKEENûTOûSEEûSOMEûOFûTHEû53û h)T SûAûGOOD
QUALITYûNAME ûIT SûGREEN
implementation there may be a slowdown
BANKSûORûBIGûSELF
FUNDERSûCOMINGûWITHûAûDEALû STAMPED ûTHERE SûNOûCOMPETINGûTRADE ûITû in issuance. But the market is already very
paying 15bp–20bp new issue premium WORKS û)TûWOULDûBEûDIFlCULTûFORûOTHERûISSUERSû RESPONSIVE ûTHOUGHûCOUPONSûAREûSTILLûKINDûOFû
MAXIMUMûANDûGETTINGûGOODûDEMAND vû to get the same successful outcome at the NEGATIVEûAGAINSTûTHEûINmATIONûRATES ûTHINGSû
MOMENT û)TûREALLYûDEPENDSûONûTHEûNAMEûANDû AREûGETTINGûHEALTHIERûINûTERMSûOFûYIELDS vûTHEû
GERMANS HIT REVIVED THEûPRODUCT vûTHEûSECONDûBANKERûSAID ûADDINGû third banker said.
EURO COVERED MARKET HEûEXPECTEDûTHEûTRADEûATTRACTEDûDECENTûNON
domestic demand. NON-CORE CURRENCIES
LANDESBANK BADEN-WUERTTEMBERG and DEUTSCHE
PFANDBRIEFBANKûLEDûAûMINI
REVIVALûOFûTHEûEUROû %ITHERûWAY ûTHEûCONCESSIONûPAIDûWASûFARû TD BANK DRAWS KANGAROO COVER
COVEREDûBONDûMARKETûLASTûWEEK ûTAKINGû SMALLERûTHANûTHEûDOUBLE
DIGITûPREMIUMSûTHATû
ADVANTAGEûOFûAûQUIETERûPERIODûFORûSUPPLYûTOû had become the norm in the weeks leading TORONTO-DOMINION BANKûRAISEDû! BNû
garner big demand at more normalised up to the summer break. 53 BN ûFROMûAûDUAL
TRANCHEû+ANGAROOû
concessions. covered bond offering on Thursday via joint
PBB FOLLOWS lead managers ANZ ûCBA ûDBS ûNAB ûTD
Execution dynamics in the euro covered $EUTSCHEû0FANDBRIEFBANKûFOLLOWEDûONû Securities and Westpac.
BONDûMARKETûHADûSUFFEREDûINû*UNEûASûISSUERSû Tuesday with a €750m 1.75% March 2027
rushed to get deals done ahead of the transaction. 4HEû! BNûmOATING
RATEûNOTEûPRICEDû
summer holiday season and the INSIDEûTHEû BPûAREAûGUIDANCEûATûTHREE
implementation of the EU’s covered bond h) MûNOTûSURPRISEDûTOûSEEûAûSECONDû;'ERMAN=û MONTHû""37ûPLUSû BP û4HEû! Mû û
DIRECTIVEûINûEARLYû*ULY ûRESULTINGûINûAûFALLûINû NAMEûCOMEûTOûTHEûMARKET ûFOLLOWINGû,""7 Sû lXED
RATEûTRANCHEûPRICEDûATû ûTOûYIELDû
oversubscription ratios and a rise in new GREATûSUCCESS vûAûTHIRDûBANKER ûAWAYûFROMûTHEû û BPûWIDEûOFûASSETûSWAPS
issue premiums. TRADEûSAID ûTHOUGHûHEûADDEDûTHATûPBBûGOTûAû
more moderate reception. 4HEûCLEARINGûMARGINûWASû BPûTIGHTERûTHANû
"UT ûWITHûINVESTORSûHAVINGûAPPARENTLYû THEûSPREADûPAIDûBYû#ANADIANû)MPERIALû"ANKû
regained their appetite after a couple of h#LEARLYû;PBB=ûWASN TûGREEN ûCLEARLYûITûWASû OFû#OMMERCE û3YDNEYûBRANCH ûFORûITSû! BNû
WEEKSûOFûMEAGREûSUPPLY û,""7ûSETûTHEûTONEû NOTû4RIPLEû! û3O ûTHATûPROBABLYûEXPLAINSûTHEû THREE
YEARûCOVEREDûBONDûSALEûONû*ULYû û
with a €1bn February 2028 green Pfandbrief little momentum LBBW had and pbb didn’t
THATûSCOREDûONEûOFûTHEûJOINT
LARGESTûORDERû have. But for a period that is perceived as 4WOûDAYSûEARLIER û2OYALû"ANKûOFû#ANADAû
books seen this year in the euro covered ABSOLUTELYûQUIET ûBOTHûISSUERSûHAVEûDONEû 3YDNEYûBRANCHûISSUEDû! BNûOFûlVE
YEARû
BONDûSPACE ûACCORDINGûTOû)&2ûDATA û extremely well. Pbb chose a slightly shorter COVEREDûBONDSûATû BPûOVERûTHREE
MONTHû
tenor – 12 months shorter – and achieved BBSW and asset swaps.
ING, LBBW, Natixis, Nordea, Santander and SIZE ûNONEûOFûTHEIRûOUTSTANDINGûTRADESûAREû
UniCredit began marketing the trade at the BIGGERûTHANûõ M v Major Canadian banks are the most active
MID
SWAPSûPLUSû BPûAREAûANDûWEREûABLEûTOû OFFSHOREûPARTICIPANTSûINûTHEû!USTRALIANû
LANDûATûPLUSû BP ûHAVINGûRECEIVEDûMOREûTHANû Commerzbank, LBBW, Natixis, NordLB and COVEREDûBONDûMARKET ûEITHERûVIAûTHEIRû
õ BNûINûORDERS Santander began marketing the benchmark Sydney branches or in Kangaroo format.
TRADEûATûTHEûMID
SWAPSûPLUSû BPûAREA
h,""7ûWASûAûBLOWOUT û)T Sû ûTIMESû "ESIDESû4$û"ANK û#)"# û2"#ûANDû"ANKûOFû
OVERSUBSCRIBED ûTHEY VEûTIGHTENEDûTHEû The leads tightened to plus at 6bp by the .OVAû3COTIA ûONLYû3WEDISHûMORTGAGEûLENDERû
spread by 5bp – one of the tightest moves END ûHAVINGûGOTûMOREûTHANûõ BNûOFûORDERSû 3TADSHYPOTEK û.ORWAY Sû$."û"OLIGKREDITT û
WE VEûSEENûTHISûYEAR vûSAIDûAûBANKERûAWAYû INCLUDINGûõ MûOFûLEADûINTEREST ûATûREOFFER û 3INGAPORE Sû$"3û"ANK ûPLUSû+IWIBANKûANDû
from the trade. ".:ûFROMû.EWû:EALANDûHAVEûSOLDûCOVEREDû
4HEûSECONDûBANKER ûWHOûWORKEDûONûTHEû +ANGAROOSûSINCEûTHEûlNANCIALûCRISIS
Onlookers had divergent views on the TRADE ûSAIDûTHEûLENDERûLEFTû BPûONûTHEûTABLE û
pricing dynamics on display. while for the third banker the concession HIGH-YIELD
was around 6bp.
h(ONESTLY û)ûTHINKûTHEûDEALûWASûMISPRICED û UNITED STATES
4HEYûSTARTEDûTOOûWIDE ûINûMYûVIEW ûFAIRûVALUEû !ûFOURTHûBANKER ûAWAYûFROMûTHEûTRADE û
BEINGûAROUNDûmATûTOû BP û)T SûQUITEûTHEû said the spread between pbb and LBBW was CORNERSTONE NO FOUNDATION
CONCESSIONûFORûAûNAMEûSUCHûASû,""7 vûTHEû TOûBEûEXPECTED ûGIVENûTHEûDIFFERENCEûINû FOR LBO RALLY
BANKERûSAID ûPOINTINGûOUTûTHATûTHEûõ Mû*ULYû expected ratings.
ûCOVEREDû,""7ûISSUEDûINû*ANUARYûPRICEDû CORNERSTONE BUILDING BRANDS took advantage
at 5bp through and offered no premium. h;,OOKINGûATû,""7ûANDûPBB= û)ûWASû OFûAûRAREûRALLYûINû53ûHIGH
YIELDûONû7EDNESDAYû
SURPRISEDûATûHOWûTIGHTû'ERMANû0FANDBRIEFû TOûPRICEû*ULY SûlRSTûJUNKûBONDûOFFERING û9ET û
ALL SAMURAI BONDS ISSUESûCANûCOME ûNOTûVERSUSûTHEIRûOWNûCURVESû WHILEûTHEûlNANCINGûDIDûGETûDONE ûBANKERSû
BOOKRUNNERS: 1/1/2022 TO DATE nûTHAT SûlNEûnûBUTûVERSUSûPRINTSûWEûSAWûTWOû should not see it as a blueprint for future
TOûTHREEûWEEKSûAGO ûWHENûSOMEûCOREûNAMESû leveraged buyout deals.
Managing No of Total Share NEEDEDûALMOSTû BPûINûlVEûYEARS vûHEûSAID û
bank or group issues ¥(m) (%) though lack of much supply currently might )Nû-ARCH û#LAYTONû$UBILIERû û2ICEû
be one reason. ANNOUNCEDûITûWASûACQUIRINGûTHEû ûOFû
1 Sumitomo Mitsui 10 172,600.00 26.0 Cornerstone it did not already own in an
2 Morgan Stanley 10 134,016.67 20.2 “That pbb was able to copy and paste a deal ALL
CASHûTRANSACTIONûWITHûANûENTERPRISEû
3 Mizuho 15 122,316.67 18.4 FROMû,""7ûWASN TûAûSURPRISE û)T SûAûGREATû
=3 Nomura 15 122,316.67 18.4 outcome for them and a good sign for the
5 Daiwa Securities 14 83,950.00 12.6 HEALTHûOFûTHEûMARKET vûTHEûTHIRDûBANKERûSAID
6 Natixis 5 28,600.00 4.3
25 663,800.00 &ORûMARKETûPARTICIPANTS ûTHESEûTWOûDEALSû
Total INDICATEûTHATû'ERMANûISSUERSûHAVEûQUICKLYû
got up to speed with the new EU covered
Excluding equity-related debt. SDC code: K11 BONDûFRAMEWORK ûWHICHûHASûNOWûBEENû
Source: Refinitiv implemented into national laws across all
member states.
30 International Financing Review July 23 2022
BONDS HIGH-YIELD
VALUEûOFûABOUTû53 BN ûINCLUDINGûDEBT The infrastructure business priced the THEûCOMPANY SûCREDITWORTHINESS vûSAIDû3 0û
3INCEûTHEN ûNOTûAûLOTûHASûGONEûINûTHEû US$50m tap of the 10.5% 2027 senior INûAûNOTEûFROMû*UNE
SECUREDûNOTESûATû ûTOûYIELDû û
highly levered deal’s favour. Rates began to ,EAD
LEFTûWASûMorgan Stanley with EUROPE/MIDDLE EAST/
RISE ûRECESSIONûFEARSûINTENSIlED ûANDûnû bookrunner Barclays. AFRICA
crucial for a maker of residential building
materials – housing starts have slowed. )TûWILLûUSEûPROCEEDSûFROMûITSûNEWûNOTES û BLACKROCK BETS ON DIRECT LENDING
ALONGûWITHû53 MûINûPREFERREDûSTOCK ûTOû AS HIGH-YIELD BOND SUPPLY TUMBLES
!SûONEûHIGH
YIELDûPORTFOLIOûMANAGERûPUTû pay a dividend to parent company Fortress
it: “Cornerstone struggled because it is 4RANSPORTATIONûANDû)NFRASTRUCTUREû)NVESTORS û BlackRock is betting on direct lending to
HIGHLYûLEVERAGEDûANDûHOUSING
RELATEDûASû which will use it to repay existing debt. SEIZEûOPPORTUNITIESûINûCORPORATEûlNANCINGû
HOUSINGûDATAûISûGETTINGûWEAKER v ASûITûANTICIPATESûAûmURRYûOFûDEALSûFROMû
&4!)û)NFRASTRUCTUREûPRICEDûTHEû53 Mû borrowers shut out of public debt markets.
"ANKSûWHICHûUNDERWROTEûTHEû53 BN
BONDûONû*UNEû ûATûAûYIELDûOFû ûWITHûAû
plus of debt backing the LBO have also had ûCOUPONûTOûFUNDûITSûSPIN
OFFûFROMû&4!) û (IGHERûRATESûANDûTIGHTENINGûlNANCIALû
TOûWATCHûASûHIGH
YIELDûBONDûPRICESûBEGANûAû )TûWASûORIGINALLYûLAUNCHEDûATû53 MûBUTû conditions will put company balance
swift descent from the high 90s in March WASûDOWNSIZEDûBYû53 MûUPONûlNALû sheets to the test as markets discount
TOûTHEûYEAR SûLOWûOFû ûONû*UNEû û pricing. FUTUREûEARNINGS ûPOTENTIALLYûTRIGGERINGû
ACCORDINGûTOû)#%û"OF!ûDATA more to seek alternative sources of
7HENûTHEûISSUERûINITIALLYûPRICEDûTHEûDEAL û lNANCINGûOUTûOFûTRADEDûMARKETS
9ET ûLEADS
LEFTûDeutsche Bank and UBS THEûAVERAGEû3INGLEû"û53û(IGH
9IELDû)NDEXû
DECIDEDûTOûHITûTHEûMARKETûONû7EDNESDAY û WASûATû BP û)TûHASûSINCEûTIGHTENEDûBYû BPû )NûITSû ûMID
YEARûGLOBALûCREDITû
WHENûTHEûPRICEûINDEXûROSEûTOû ûTOû TOû BPûASûOFû*ULYû ûACCORDINGûTOû)#%û"OF!û OUTLOOK û"LACK2OCKûSAIDûBUSINESSESûLEASTû
print a US$710m bond. Unusually in the data. prepared to withstand these changes may
CURRENTûMARKET ûTHEûBONDûWASûINCREASEDûBYû lNDûPRIVATEûMARKETûSOLUTIONSûMOREû
53 MûATûTHEûEXPENSEûOFûTHEûLOAN û Moody’s and S&P assigned B2 and B– ESSENTIALûASûRISKûPREMIUMS ûSPREADû
which was cut by the same amount to RATINGSûTOû&4!)û)NFRASTRUCTUREûANDûITSûNEWû decompression and investor selectivity
53 M ûLIKELYûAFTERûAûSINGLEûINTERESTEDû BONDSûINû*UNE û3 0ûSAIDûITûEXPECTEDûTHEû increase.
BUYERûTOOKûONûAûMOREûSIGNIlCANTûPORTION COMPANY SûDEBT
TO
%BITDAûRATIOûTOûBEû
elevated in 2022 but to improve to about 7.5 h2ISKûPREMIUMSûAREûRISING ûANDûINVESTORû
.ONETHELESS ûWHILEûTHEûUNDERWRITERSû TIMESûINû PROTECTIONSûAREûIMPROVING ûANDûASûPUBLICû
COULDûGETûTHEûFUNDRAISINGSûDONE ûTHEûDEALû
was heavily discounted. h(AVINGûAûCONSISTENTûlNANCIALûSTRATEGYû
and policies will be a key consideration for
h!SûFORû#.2û;#ORNERSTONE= ûWEûUSEDûTOû
own the bonds and generally like the ALL US$ DENOMINATED HIGH-YIELD BONDS ALL NON-DOLLAR DENOMINATED HIGH-YIELD BONDS
CREDIT vûSAIDûANOTHERûHIGH
YIELDûPORTFOLIOû BOOKRUNNERS – 1/1/2022 TO DATE 1/1/2022 TO DATE
MANAGER ûh*USTûDIDN TûTHINKûITûWASûTHEûRIGHTû
timing to invest in an LBO with so much Managing No of Total Share Managing No of Total Share
UNCERTAINTYûONûINmATION ûWHEREûRATESûWILLû bank or group issues US$(m) (%) bank or group issues €(m) (%)
GO ûHOWûMUCHûOFûANûECONOMICûSLOWDOWNûWEû
GETûASûTHEû&EDûATTEMPTSûTOûSLOWûDEMAND v 1 Goldman Sachs 47 8,109.12 10.7 1 Goldman Sachs 13 1,837.76 11.1
2 JP Morgan 52 7,797.56 10.3 2 Deutsche Bank 14 1,441.59 8.7
4HEûSIX
YEARûNON
CALLûTWOûSENIORûSECUREDû 3 Citigroup 45 6,062.70 8.0 3 Credit Suisse 8 1,242.40 7.5
note printed at a yield of 11% with an 8.75% 4 Bank of America 54 5,551.24 7.3 4 JP Morgan 11 1,158.00 7.0
coupon and original issue discount of 5 Wells Fargo 41 3,940.89 5.2 5 BNP Paribas 12 893.72 5.4
ûINûLINEûWITHûPRICEûTALK 6 Credit Suisse 31 3,571.50 4.7 6 Barclays 9 822.00 5.0
7 Barclays 38 3,448.48 4.6 7 UniCredit 7 749.98 4.5
!TûTHEûSAMEûTIME û#ORNERSTONEûPRICEDû 8 Morgan Stanley 31 3,296.92 4.4 8 Morgan Stanley 9 745.61 4.5
THEû53 MûSIX
YEARûTERMûLOANûATû BPû 9 Deutsche Bank 25 2,588.65 3.4 9 HSBC 7 592.35 3.6
OVERû3/&2ûWITHûAû ûmOOR û4HEûORIGINALû 10 Jefferies 13 1,980.53 2.6 10 Citigroup 6 577.07 3.5
ISSUEûDISCOUNTûWASûlNALISEDûATû ûWIDERû 111 75,754.66 41 16,588.49
THANûTHEûINITIALûGUIDANCEûOFû Total Total
SDC code: B6
4HEûLOANûISûNON
CALLABLEûUNTILû!UGUSTû û Including US domestics, Euro, foreign, globals. Excluding equity-related debt. Excluding equity-related debt.
û!FTERûTHAT ûCALLûPROTECTIONûISûSETûATû Source: Refinitiv
ûUNTILû!UGUSTû û ûDECREASINGûTOû Source: Refinitiv SDC code: B5
ûUNTILû!UGUSTû û ûWHENûITûWILLû
be at par. ALL EUROPEAN HIGH-YIELD ISSUERS ALL ASIAN HIGH-YIELD ISSUERS
1/1/2022 TO DATE 1/1/2022 TO DATE
Barclays ûBNP Paribas ûRBC ûSociete Generale û
Goldman Sachs ûNatixis and Jefferies also Managing No of Total Share Managing No of Total Share
participated as bond and loan bank or group issues US$(m) (%) bank or group issues US$(m) (%)
bookrunners.
1 Goldman Sachs 17 5,779.65 21.9 1 JP Morgan 4 1,594.63 18.9
4HEûBOND ûLOANûANDûWHATûWASûEXPECTEDû 2 Deutsche Bank 15 1,773.26 6.7 2 Credit Suisse 4 554.55 6.6
TOûBEû53 MûINû0)+ûNOTES ûWEREûSLATEDû 3 Credit Suisse 10 1,712.42 6.5 3 Societe Generale 2 475.00 5.6
TOûlNANCEû#$ 2 SûPURCHASEûOFûTHEû ûOFû 4 JP Morgan 12 1,555.04 5.9 4 Citigroup 2 475.00 5.6
Cornerstone it does not already own. 5 Bank of America 9 1,409.32 5.3 5 Deutsche Bank 5 473.65 5.6
6 BNP Paribas 12 1,117.34 4.2 6 HSBC 7 431.46 5.1
FTAI INFRASTRUCTURE ADDS US$50m 7 Morgan Stanley 10 1,050.10 4.0 7 Morgan Stanley 2 385.39 4.6
TO JUNE BOND 8 Barclays 10 1,018.50 3.9 8 Barclays 5 363.23 4.3
9 Citigroup 8 876.28 3.3 9 Goldman Sachs 3 258.21 3.1
FTAI INFRASTRUCTURE returned to the primary 10 UniCredit 7 845.65 3.2 10 Credit Agricole 2 233.31 2.8
MARKETûONû4HURSDAYûWITHûANûADD
ONûTOûITSû 47 26,390.96 17
53 MûHIGH
YIELDûBONDûlRSTûRAISEDûINû*UNE Total Total 8,427.21
SDC code: B06c
Excluding equity-related debt. Excluding equity-related debt. SDC code: B06d
Source: Refinitiv Source: Refinitiv
International Financing Review July 23 2022 31
MARKETûVOLATILITYûREMAINSûHIGH ûSOMEû STRUCTURED FINANCE DISCOUNTûMARGINûOFû BPûOVERû3ONIA ûAû
companies will turn to private markets for 3INGLEû!ûRATEDû#LASSû#ûNOTEûOFûTHEûSAMEûSIZEû
lNANCINGûSOLUTIONS vûITûSAID EMEA MBS THATûWASûPRICEDûATû BP ûANDûAûõ Mû
4RIPLEû"ûRATEDû#LASSû$ûNOTEûATû BP
"ONDûSALESûINûTHEûHIGH
YIELDûCORPORATEû THIN ABS PIPELINE REMAINS
bond market have tumbled so far this year AFTER TWO STERLING DEALS !ûõ Mû$OUBLEû"ûRATEDû#LASSû%ûNOTEûWASû
ONûTHEûBACKûOFûDEEPENINGûRECESSIONûFEARS û not broadly offered and was retained by
fuelled by central bank tightening to The European securitisation market could THEûISSUERûASûITûDIDûNOTûNEEDûTHEûFUNDING û
COMBATûRAMPANTûINmATION ûANDû2USSIA Sû still see a handful more deals price in the ACCORDINGûTOûTHEûBANKER û)TûWASûPRICEDûATû
war in Ukraine. LASTûWEEKûOFû*ULYûAFTERû5+ûSPECIALISTûLENDERû 500bp over Sonia.
TOGETHER and credit card provider NEWDAY
The handful of companies that both wrapped up offerings against an Together was swiftly followed by NEWDAY
have dared to raise funds in recent improving credit backdrop on Wednesday. FUNDING MASTER ISSUER PLC – SERIES 2022-2 ûTHEû
months have had to pay up to attract £189.7m senior tranche of which took the
INTERESTûFROMûCREDITûFUNDûMANAGERS û h)ûDON TûTHINKûEVERYTHING SûDONEûYET vû form of a loan note bought by Citi ûWHICHû
who in turn are taking a hit from said a banker at one of the bookrunners on was also one of the lead managers
OUTmOWSûANDûSTRUGGLINGûTOûGETûOUTûOFû the two sterling deals. “There are a couple alongside BNP Paribas ûHSBC and Societe
POSITIONSûASûLIQUIDITYûINûTHEûSECONDARYû of projects out there looking to wrap up Generale.
market dries up. NEXTûWEEK v
4HEûLOANûNOTE ûWHICHûMADEûUPûSOMEû û
4HEûLATESTûHIGH
YIELDûlXED
RATEûDEAL û !NDûTHEûCHANCESûOFûNAILINGûDOWNûPRICINGû OFûTHEûTOTALûDEALûSIZE ûEFFECTIVELYûCOMBINEDû
û(OLDINGS ûõ MûOFû û have improved in the past few days as WHATûWOULDûHAVEûBEENûTHEû#LASSû!ûANDû
lVE
YEARûNOTES ûPRICEDûATûAûHUGEû investors have been reassured by strong #LASSû"ûNOTES ûSOûTHATûTHEûNEXTûTRANCHEû
DISCOUNTûTOûPAR ûATû ûIMPLYINGû corporate earnings from the US and the DOWNûWASûLABELLEDû#LASSû# û4HEûa Mû
a yield of 11.5%. resumption of Russian gas deliveries to 3INGLEû!ûRATEDûBONDûWASûPRICEDûATû BPû
Europe. OVERû3ONIA ûWHILEûTHEûSPREADûONûTHEûa Mû
Private lending is offering roughly a 4RIPLEû"ûRATEDû#LASSû$ûNOTEûWASû BP û
BPn BPûSPREADûPREMIUMûFORû h)TûREALLYûOSCILLATESûDAYûBYûDAY vûSAIDû 4HEYûWEREûROUGHLYû ûANDû ûTIMESû
ILLIQUIDITYûANDûIDIOSYNCRATICûRISKûONûAû another banker that was involved in last COVERED ûRESPECTIVELY
CREDIT
MATCHEDûBASIS û"LACK2OCKûSAID week’s primary action. “Fortunately for
OURûMARKET ûWEûDON TûGETûAFFECTEDûTHATû Rounding out the capital structure were
“Opportunistic transactions are less instantly – there’s a bit of a lag – but you’re Aûa Mû$OUBLEû"ûRATEDû#LASSû%ûNOTEûPRICEDû
COMPARABLEûTOûTRADEDûMARKETS ûBUTûWEû conscious of the broader sentiment at 700bp and a £16.7m Single B rated Class
expect a higher volume of deals to provide DEPENDINGûONûTHEûQUESTIONûYOU REûASKINGû &ûNOTEûPRICEDûATû BP û!SûWITHû4OGETHER Sû
ATTRACTIVEûILLIQUIDITYûANDûCOMPLEXITYû ONûTHEûDAY v DEAL ûTHEûSUB
INVESTMENTûGRADEûTRANCHESû
PREMIUM vûITûSAID were retained by the issuer.
4HEûPREVIOUSû4HURSDAYûANDû&RIDAY ûFORû
Private lending instruments have INSTANCE ûTHEûBANKERûSAIDûLEADûMANAGERSû )TûWASû.EW$AY SûSECONDûVISITûTOûTHEû
SWOLLENûTOû53 TRN ûBECOMINGûONEûOFûTHEû had held back from pushing price talk on MARKETûINûFAIRLYûQUICKûSUCCESSIONûANDûAû
fastest growing segments in corporate investors due to the poor market comparison of the two shows how far
lNANCE sentiment. “We left it till things settled spreads have widened since its last
DOWNûAûBIT vûHEûSAID DEALûWASûPRICEDûONû!PRILû û4HEû4RIPLEû!û
)Nû-AY û"LACK2OCKûREPORTEDLYûRAISEDû tranche of that outing was priced at
ABOUTû53 BN ûHALFûOFûITSûTARGETEDûAMOUNT û "YûLASTû7EDNESDAY ûTHINGSûHADûSETTLEDû BPûOVERû3ONIA ûTHEû3INGLEû!ûTRANCHEû
for a new private credit fund. Fundraising DOWNûENOUGHûFORûTHEûTWOûPRE
PLACEDû5+û at 250bp and the Triple B tranche at
was still ongoing. SECURITISATIONSûTOûHITûSCREENS ûANDû4OGETHERû 290bp.
CAMEûlRSTûWITHûITSûTHIRDûDEALûOFûTHEûYEAR ûAû
LOANS VERSUS BONDS ROUGHLYûa MûNON
CONFORMINGû5+û2-"3û $ESPITEûTHEûWIDEûPRICINGûCOMPAREDûWITHû
4OûBEûSURE ûTHEûASSETûMANAGERûALSOû BACKEDûBYûlRST
LIENûMORTGAGESûONûAû EARLIERûINûTHEûYEAR ûTHEûFACTûTHATûTHEûMARKETû
SEESûhIDIOSYNCRATICûOPPORTUNITIESvûINû combination of commercial and is still absorbing substantial amounts of
traded debt markets and continues to residential properties. paper is seen as a positive by bankers
DEPLOYûCAPITALûSELECTIVELY û)TûSTILLûPREFERSû looking to get a few more transactions
loans to bonds but that may change BNP Paribas ûLloyds and NatWest Markets over the line before summer sets in.
SOON ûITûSAID were the leads on TOGETHER ASSET BACKED
SECURITISATION – 2022-1ST1 ûPLACINGûFOURûRATEDû h4HEûCOVERAGEûLEVELSû;FORû.EW$AY=ûSHOWSû
“With rates having already priced in a TRANCHESûINCLUDINGûAûa Mû4RIPLEû!û that there’s still demand for established
LOT ûTHEREûISûPOTENTIALûFORûAûROTATIONûLEADINGû RATEDû#LASSû!ûNOTEûPRICEDûATû BPûOVERû ISSUERS vûSAIDûONE
to bond outperformance in the months Sonia and sold at par.
AHEADûWHICHûWEûAREûMONITORINGûCLOSELY vûITû FUCINO PRICES RESTRUCTURED
said. The pricing of the senior tranche ITALIAN RMBS
compares favourably with the discount
BlackRock pointed to euro loans MARGINûOFû BPûACHIEVEDûBYû0ARATUSû!-#û BANCA DEL FUCINO priced a new €118m senior
OUTPERFORMINGûSOûFARûTHISûYEAR ûMOSTLYû INûTHEûlRSTûWEEKûOFû*ULY ûWHICHûAûBANKERûATû TRANCHEûOFûANû)TALIANûSTATICû2-"3û
DUEûTOûTHEIRûDURATIONûPROlLE ûPOSTINGû one of Together’s leads put down to transaction that it recently restructured.
TOTALûRETURNSûOFûMINUSû ûCOMPAREDû Together’s strong following among
TOûMINUSû ûINûEUROûHIGH
YIELDû investors. The FUCINO RMBS notes have a coupon of
bonds. BPûOVERûTHREE
MONTHû%URIBORûANDûWEREû
"ELOWûTHEû4RIPLEû!ûTRANCHEûWASûAû SOLDûATûAûCASHûPRICEûOFû ûTOûPRODUCEûAû
The asset manager does not expect a ROUGHLYûõ Mû$OUBLEû!ûRATEDû#LASSû"ûNOTEû DISCOUNTûMARGINûOFû BPûONû*ULYû û!û
deep recession with the usual default spike THATûWASûPRICEDûATû ûTOûPRODUCEûAû portion of the deal was retained by the
but a readjustment in monetary policy to issuer.
ADAPTûTOûSLOWINGûGROWTH ûWITHûCOMPANIESû
focusing on balance sheet preservation 4HEû343ûBONDSûHAVEûAûWEIGHTED
AVERAGEû
ANDûSTRATEGIESûTOûWITHSTANDûNEAR
TERMû LIFEûOFû ûYEARS
uncertainty.
32 International Financing Review July 23 2022
STRUCTURED FINANCE
NEW ASSET–BACKED SUMMARY DETAILS: WEEK ENDING 22/7/2022
Issuer Amount (m) WAL DM Bookrunner(s) Rating Asset type
Groupe BPCE/Natixis/UniCredit Aaa/NR/NR ABS
BPCE Consumer Loans Fct 2022 €1,000 4.7 1mE+55bp BNPP NR/AAA/AAA CLO
BNPP NR/AAA/AAA CLO
Clonmore Park CLO DAC €60 5.9 E+170bp BNPP NR/AA/AA CLO
BNPP NR/AA/AA CLO
Clonmore Park CLO DAC €148.25 5.9 E+170bp BNPP NR/A+/A+ CLO
BNPP NR/A/A/ CLO
Clonmore Park CLO DAC €27.125 7.4 E+400bp BNPP NR/BBB/BBB CLO
BNPP NR/BBB–/BBB– CLO
Clonmore Park CLO DAC €13.125 7.4 – BNPP NR/BB–/BB– CLO
BNPP NR/B–/B– CLO
Clonmore Park CLO DAC €14.5 8.1 E+493bp BNPP NR/NR/NR CLO
JP Morgan/Goldman Sachs NR/NR/NR CMBS
Clonmore Park CLO DAC €6.5 8.3 E+518bp Wells Fargo/Citgroup NR/NR/AAA CMBS
Wells Fargo/Citgroup NR/NR/NR CMBS
Clonmore Park CLO DAC €15.75 8.6 E+708bp Goldman Sachs NR/NR/NR ABS
Goldman Sachs NR/NR/NR ABS
Clonmore Park CLO DAC €6.125 8.9 E+736bp Goldman Sachs NR/NR/NR ABS
Goldman Sachs NR/NR/NR ABS
Clonmore Park CLO DAC €15.5 9.2 E+1125bp Goldman Sachs Aaa/NR/NR CMBS
Goldman Sachs Aa3/NR/NR CMBS
Clonmore Park CLO DAC €11 9.7 E+1150bp Goldman Sachs A3/NR/NR CMBS
Goldman Sachs Baa3/NR/NR CMBS
Clonmore Park CLO DAC €23 –– Citgroup/Societe Generale/BNPP/HSBC NR/NR/A ABS
Citgroup/Societe Generale/BNPP/HSBC NR/NR/BBB ABS
Freddie Mac Spc Series K–F140 US$869.358 6.6 SOFR+55bp Wells Fargo Aaa/NR/NR CLO
Wells Fargo Aaa/NR/NR CLO
Freddie Mac Wi–K149 US$850 10.24 P+92bp Wells Fargo NR/NR/AA CLO
Wells Fargo NR/NR/AA CLO
Freddie Mac Wi–K149 US$190 10.24 P+99bp Wells Fargo NR/NR/A CLO
Wells Fargo NR/NR/BBB– CLO
GHIT 2022–GRN1 US$179.831 1.67 +215bp Wells Fargo NR/NR/BB– CLO
Wells Fargo B3/NR/NR CLO
GHIT 2022–GRN1 US$18.489 2.78 +310bp BNPP/Lloyds/NatWest Markets NR/AAA/AAA RMBS
BNPP/Lloyds/NatWest Markets NR/AA+/AA RMBS
GHIT 2022–GRN1 US$13.966 2.78 +425bp BNPP/Lloyds/NatWest Markets NR/A+/A RMBS
BNPP/Lloyds/NatWest Markets NR/BBB/BBB RMBS
GHIT 2022–GRN1 US$12.636 2.78 +525bp
GSMS 2022–SHIP US$341.05 1.04 +200bp
GSMS 2022–SHIP US$75.24 1.04 +270bp
GSMS 2022–SHIP US$66.12 1,04 +320bp
GSMS 2022–SHIP US$69.224 1.04 +370bp
Newday Funding Master Issuer £39.746 3.0 SONIA+500bp
Newday Funding Master Issuer £44.088 3.0 SONIA+650bp
Symphony XXXV US$250 4.44 –
Symphony XXXV US$6 4.44 –
Symphony XXXV US$22 6.22 –
Symphony XXXV US$24 6.22 –
Symphony XXXV US$22 6.61 –
Symphony XXXV US$24 7.01 –
Symphony XXXV US$15.75 7.52 –
Symphony XXXV US$0.5 7.69 –
TASB 2022–1ST £444.485 2.78 SONIA+140bp
TASB 2022–1ST £14.983 3.87 –
TASB 2022–1ST £14.983 3.87 SONIA+340bp
TASB 2022–1ST £12.486 3.87 SONIA+480bp
&UCINOû2-"3ûISSUEDûTHEûBONDSûINû*UNEûANDû EMEA ABS syndicate banker away from BPCE’s deal.
held on to them while JP Morgan ûTHEû But the recent extended bout of volatility
ARRANGERûANDûPLACEMENTûAGENT ûSOUNDEDûOUTû BPCE DEAL SHOWS PRIVATE FORMAT
THEûMARKETûPRIVATELY û)NITIALûPRICEûTHOUGHTSû CATCHING ON IN EURO ABS appears to have brought about a shift in
WEREû BPn BPûOVERû%URIBOR ûACCORDINGû STRATEGY ûASûEUROû!"3ûISSUERSûHAVEûSEENûNOû
TOûAû*0û-ORGANûRESEARCHûREPORT BPCE GROUP has joined a wave of European other choice but to approach investors away
issuers placing securitisations privately in from screens. The market appears to have
Fucino used about half of the proceeds to challenging market conditions as euro reached a turning point in late May when
redeem the €59.5m outstanding under the investors gradually adjust to the unfamiliar 03!û&INANCIALû3ERVICESûPULLEDûAû3PANISHûAUTOû
OLDû#LASSû!ûBONDS ûWHICHûWEREûORIGINALLYû approach. !"3ûTHATûITûHADûBEENûMARKETINGûPUBLICLYûANDû
issued in 2019. The rest was put towards the Santander ended up retaining the
purchase of €52.9m of new mortgages from Private placements have historically been MEZZANINEûTRANCHESûOFûAû&INNISHûAUTOûDEAL û
Fucino as well as the partial repayment of MUCHûMOREûCOMMONûINûSTERLINGû!"3ûTHANûINû Kimi 11.
THEû#LASSû"ûANDû#LASSû*ûNOTESûANDûAûLOANûFROMû EUROS ûINûPARTûBECAUSEûEURO
FOCUSEDû
ANOTHERû)TALIANûREGIONALûBANK û)GEAû"ANCA û INVESTORSûAREûMOREûLIKELYûTOûBEûUNABLE ûORûATû 3INCEûTHEN ûONLYûONEûEUROû!"3ûHASûGONEû
which has since merged with Fucino. LEASTûRELUCTANT ûTOûPARTICIPATEûINûAûBEHIND
through a public marketing process – a
THE
SCENESûSOUNDINGûPROCESS French credit card deal from Carrefour
&OLLOWINGûTHEûRESTRUCTURING ûTHEûCAPITALû "ANQUEûnûWHILEûSEVERALûISSUERSûINûTHEû
STRUCTUREûCOMPRISESûõ MûOFû#LASSû!ûNOTES û h9OUûCANûDOûITûONûTHEûMEZZANINEûPARTûnûIT Sû CURRENCYûHAVEûOPTEDûFORûTHEûPRIVATEûROUTE û
õ MûOFû#LASSû"ûNOTESûANDûõ MûOFû relatively easy because the number of the last being Sabadell’s Sabadell Consumo
UNRATEDûCLASSû*ûNOTES people is limited and they are keen to get ûINûEARLYû*ULY
WALL
CROSSEDûnûBUTûIT SûANOTHERûSTORYûIFûYOU REû
-ILAN
BASEDûSTRUCTUREDûlNANCEûADVISORYû TALKINGûABOUTûSELLINGûTHEûSENIORûPART vûSAIDûAû !NDûASûISSUERSûHAVEûPIVOTEDûTOûPRIVATEû
SHOPû û&INANCEûREPRESENTEDûTHEû EXECUTION ûINVESTORSûDETERMINEDûTOû
noteholders on the transaction. participate in deals have had to follow suit.
International Financing Review July 23 2022 33
h)TûSTILLûVERYûMUCHûDEPENDSûONûTHEû CONSISTINGûOFûAûõ Mû#LASSû!ûNOTEûANDûAû 4HEûDEALSûCLOSEDûINûTHEûLASTûWEEKûOFû*UNE û
INVESTOR ûBUTûIFûTHEûMARKETûISûMOVINGûTHATû õ MûUNRATEDû#LASSû"ûNOTEûWITHûAûTWO
AHEADûOFûTHEûEXPIRYûOFûTHEû%)" SûMANDATEû
WAY ûTHENûINVESTORSûWHOûWANTûTOûINVESTûBUTû year revolving period. BPCE and UniCredit UNDERûTHEû%UROPEANû'UARANTEEû&UNDûATûTHEû
don’t want to be involved in that [sounding] were arrangers and lead managers and ENDûOFûTHATûMONTH ûBUTûTHEûANNOUNCEMENTû
PROCESS ûTHEYûAREûJUSTûNOTûGOINGûTOûBEûABLEûTOû 5NI#REDITûSOLEûBOOKRUNNERûONûTHATûDEAL û was held back until last week to coincide
INVEST vûSAIDûONEûOFûTHEûLEADSûONû"0#% Sû which was also privately placed. WITHûAûVISITûTOû-ADRIDûBYû%)"ûVICE
PRESIDENTû
transaction. “We’ve seen some investors Ricardo Mourinho Felix.
WILLINGûTOûADJUST ûESPECIALLYûTHOSEûTHATûAREû EIB ATTACHES STRINGS TO BBVA
MOREûACTIVEûATûTHISûPOINT v AUTO ABS TICKET “The projects within the scope of this new
transaction cover a wide range of areas that
BPCE priced BPCE CONSUMER LOANS FCT 2022 4HEû%UROPEANû)NVESTMENTû"ANKûPARTICIPATEDû are aligned with our climate action and
ONû4UESDAY ûSELLINGûTHEûõ BNû4RIPLEû!ûRATEDû in BBVA SûRECENTû3PANISHûAUTOû!"3û ENVIRONMENTALûSUSTAINABILITYûOBJECTIVES û
senior tranche with a coupon of 55bp over transaction as part of an agreement to SUCHûASûENERGYûEFlCIENCYûANDûTHEûPROMOTIONû
ONE
MONTHû%URIBORû mOOREDûATûZERO ûATûPAR stimulate lending to SMEs and the OFûRENEWABLEûENERGIES vûSAIDû-OURINHOû&ELIXû
SUSTAINABLEûECONOMY ûACCORDINGûTOûPEOPLEû in a statement.
BPCE SENIORûLEADûMANAGER ûTRANSACTIONû familiar with the transaction.
agent) and its subsidiary Natixis were joint 4HEû3PANISHûLENDERûPRICEDûITSûõ BNû""6!û
ARRANGERSûONûTHEû343ûTRANSACTION ûWHILEû ""6!ûREVEALEDûONû4UESDAYûTHEûLENDINGû #ONSUMERû!UTOû
ûTRANSACTIONûINûTHEû
Natixis and UniCredit were joint lead COMMITMENTSûITûHADûAGREEDûWITHûTHEû%)" û lRSTûWEEKûOFû*UNE ûPLACINGûõ MûACROSSû
managers. ALONGûWITHûDETAILSûOFûAûõ MûSYNTHETICû the capital stack with investors while
securitisation that was also part of the deal. RETAININGûõ MûOFû$OUBLEû!ûRATEDû#LASSû!û
There is also a €219.5m unrated Class B The announcement did not refer to the auto notes. Credit Agricole and BBVA were joint
TRANCHE ûWHICHûWASûRETAINEDûBYû"0#% !"3 leads
The deal is backed by a revolving portfolio 4HEû%)" SûINVESTMENTûINûTHEûAUTOû!"3ûDEALû 4HEûõ BNû#LASSû!ûTRANCHE ûRATEDû!! û
OFûABOUTû ûLOANSûTOû&RENCHûCONSUMERSû and the guarantee underpinning the BYû&ITCHûANDû!A ûBYû-OODY S ûWASûPRICEDûATû
ORIGINATEDûBYû ûBANQUESûPOPULAIRESûANDû û synthetic securitisation were both BPûOVERûTHREE
MONTHû%URIBOR û4HEREûWEREû
CAISSESûD EPARGNE ûALLûOFûWHICHûAREûMEMBERSû conditional on the origination of about FOURûOTHERûRATEDûTRANCHES ûWITHûTHEûSPREADû
OFû"0#%û'ROUP û4HEûASSETSûTOTALLEDûõ BNû õ BNûOFûNEWûLOANSûTOû3-%S ûRENEWABLEû RISINGûTOû BPûFORûTHEûõ MûOFû#LASSû%û
ASûOFû!PRILû ENERGYûPROJECTS ûHOUSINGûREFURBISHMENTSû NOTES ûWHICHûHADûSPLITûRATINGSûOFû"""ûFROMû
and other sustainable initiatives. &ITCHûANDû"A ûFROMû-OODY S
BPCE securitised a collateral pool of
similar origin last year through BPCE 4HEûSIZEûOFûTHEû%)" SûINVESTMENTûWASûNOTû
$EMETERû4RIAû ûAûDUALûTRANCHEûTRANSACTIONû DISCLOSED ûBUTûONEûOFûTHEûPEOPLEûFAMILIARû
with it described it as an important
GLOBAL SECURITISATIONS IN STERLING SECURITISATIONS – ALL EUROPEAN RMBS participation.
BOOKRUNNERS: 1/1/2022 TO DATE BOOKRUNNERS: 1/1/2022 TO DATE
Managing No of Total Share Managing No of Total Share LENDING COMMITMENTS
bank or group issues £(m) (%) bank or group issues €(m) (%) )NûRETURNûFORûTHEûINVESTMENTûANDûTHEû
SYNTHETICûSECURITISATIONûGUARANTEE û""6!ûHASû
1 Barclays 5 1,610.11 16.9 1 Citigroup 12 1,775.30 13.6 AGREEDûTOûORIGINATEûõ BNûINûNEWûLOANSû
2 BNP Paribas 12 1,659.85 12.8 meeting different criteria over the next
2 Bank of America 9 1,400.92 14.7 3 Bank of America 6 1,343.09 10.3 n ûMONTHS
4 Credit Agricole 2 1,304.00 10.0
3 Citigroup 10 1,340.85 14.1 5 Standard Chartered 9 1,104.05 8.5 The amount is divided into six categories
6 Barclays 5 845.79 6.5 targeting different parts of the economy.
4 StanChart 8 923.97 9.7 7 Morgan Stanley 2 838.44 6.4 4HEûlRSTûõ MûISûEARMARKEDûTOûlNANCEû
8 Natixis 7 780.05 6.0 climate action initiatives at the national and
5 BNP Paribas 7 776.99 8.2 9 NAB 5 650.45 5.0 %UROPEANûLEVEL ûINCLUDINGûREFURBISHMENTSûOFû
10 Santander 2 486.09 3.7 residential buildings by homeowners’
6 NAB 6 702.47 7.4 30 13,008.47 associations in Spain that increase energy
Total EFlCIENCY ûPURCHASESûOFûRESIDENTIALû
7 Natixis 5 464.10 4.9
8 Lloyds Bank 4 384.34 4.0
9 Macquarie 3 362.52 3.8
10 NatWest Markets 4 286.79 3.0
Total 26 9,499.89
Including Euro, foreign, global and domestics, excluding CDOs. Including Euro, foreign, global and domestics, excluding CDOs
Source: Refinitiv SDC code: B16i Source: Refinitiv SDC code: B10a
ALL EUROPEAN ISSUERS GLOBAL STRUCTURED FINANCE IN EUROS ALL INTL ISSUERS (EXCLUDING SELF-FUNDED)
BOOKRUNNERS: 1/1/2022 TO DATE BOOKRUNNERS: 1/1/2022 TO DATE BOOKRUNNERS: 1/1/2022 TO DATE
Managing No of Total Share Managing No of Total Share Managing No of Total Share
bank or group issues US$(m) (%) bank or group issues €(m) (%) bank or group issues US$(m) (%)
1 BNP Paribas 18 3,752.23 12.0 1 Credit Agricole 7 2,966.63 17.7 1 Bank of America 69 16,937.23 9.8
2 Credit Agricole 7 3,247.94 10.4 2 BNP Paribas 11 2,425.24 14.5 2 Barclays 97 16,647.48 9.6
3 Citigroup 18 3,057.43 9.8 3 Societe Generale 6 1,300.62 7.8 3 Credit Suisse 85 15,616.32 9.0
4 Bank of America 14 3,040.76 9.7 4 Citigroup 8 1,124.76 6.7 4 Citigroup 63 15,044.69 8.7
5 Barclays 9 2,815.84 9.0 5 Bank of America 5 1,006.73 6.0 5 Morgan Stanley 60 11,346.16 6.6
6 Societe Generale 7 1,523.45 4.9 6 Morgan Stanley 2 838.44 5.0 6 JP Morgan 48 9,901.58 5.7
7 Standard Chartered 10 1,397.34 4.5 7 UniCredit 3 833.27 5.0 7 Goldman Sachs 53 9,644.84 5.6
8 Natixis 8 950.00 3.0 8 Deutsche Bank 2 575.22 3.4 8 Wells Fargo 37 7,698.48 4.5
9 Morgan Stanley 2 913.96 2.9 9 Rabobank 2 506.79 3.0 9 Deutsche Bank 62 7,679.99 4.4
10 UniCredit 3 909.92 2.9 10 ABN AMRO 2 500.16 3.0 10 BNP Paribas 32 5,707.55 3.3
62 31,226.94 35 16,754.64 349 172,619.44
Total Total Total
Includes securitisations, credit-linked notes (Euro, foreign, global and Includes securitisations, credit-linked notes (Euro, foreign, global and Includes securitisations, PFI bonds and credit-linked notes. Excludes US
domestics) and excludes CDOs. domestics) and excludes CDOs. global ABS/MBS, CDOs and self funded issues.
Source: Refinitiv SDC code: B16n Source: Refinitiv SDC code: B16g Source: Refinitiv SDC code: J10d
34 International Financing Review July 23 2022
STRUCTURED FINANCE
PROPERTIESûWITHû#LASSû!û%0#ûRATINGSûTHATû embedded payment solutions to more PRIVATEûEQUITYûlRMûANNOUNCEDûITSûlNALû
MEETûTHEûREQUIREMENTSûOFûTHEû%)"ûANDûTHEû SECTORSûANDûINDUSTRIES vûSAIDû-ARTINû&EST ûTHEû CLOSINGûONû*ULYû û4HEûFUNDûAIMSûTOûREACHûAû
%5û4AXONOMY ûANDûPRIVATEûSECTORû company’s CFO. TARGETûYIELDûOFû n ûASûFUNDAMENTALSûINû
INVESTMENTSûBYû3-%SûANDûMID
CAPû THEûAUTO ûHOUSINGûANDûEQUIPMENTûlNANCINGû
companies in climate action initiatives. Sonovate provides recruitment agencies HAVEûREMAINEDûRESILIENT ûWITHûDELINQUENCIESû
WITHûINVOICEûlNANCINGûASûPARTûOFûAûBROADERû ANDûDEFAULTSûHOVERINGûNEARûHISTORICûLOWS û
4HEûSECONDûõ MûISûRING
FENCEDûFORû PACKAGEûOFûSERVICESûINCLUDINGûPAYMENT ûTIMEû SAIDû6ARUNû+HANNA ûAûMANAGINGûDIRECTORûATû
lNANCINGûTOû3PANISHû3-%SûANDûMID
CAPû sheet and contract management tools. KKR.
COMPANIESûONûPREFERENTIALûTERMS ûAûTHIRDû
õ MûPORTIONûWILLûBEûUSEDûTOûlNANCEûTHEû Fest said the company had pursued a “We have been mindful of the risk of
CONSTRUCTIONûOFû ûSOLARûPROJECTSûWITHûAû SECURITISATIONûBECAUSEûOFûITSûEFlCIENCYûANDû RISINGûRATESûFORûAûWHILE ûASûREmECTEDûINûTHEû
COMBINEDûCAPACITYûOFû -7ûINû3PAIN ûAû scalability. “We’ve been growing around 20% CURRENTûPORTFOLIOûTHEûFUNDûISûINVESTEDûIN vû
FOURTHûSLICEûOFûõ MûWILLûBEûUSEDûTOûlNANCEû QUARTER
ON
QUARTERûANDûBELIEVEûTHISûWILLû +HANNAûSAID ûh&URTHER ûINûTHEûCURRENTû
PURCHASESûOFûBUILDINGSûINû3PAINûWITHûNEAR
CONTINUE ûSOûWEûNEEDûACCESSûTOûAûSCALABLEû INmATIONARYûENVIRONMENTûWEûAREûFOCUSEDûONû
ZEROûENERGYûCONSUMPTION ûANDûTHEûlFTHû SOURCEûOFûCAPITAL vûHEûSAID sectors that are backed by real assets such as
õ MûWILLûGOûTOûWHATû""6!ûDESCRIBESûASû AUTOS ûHOUSINGûANDûEQUIPMENTûLEASES vû
SUSTAINABLEûOPERATIONS û4HEûlNALûõ Mû The company expects to provide £2bn of
SIXTHûTRANCHEûISûSPECIlCALLYûRELATEDûTOû RECEIVABLESûlNANCINGûNEXTûYEAR +HANNA û!VIû+ORNûANDû#HRISû-ELLIA ûALLû
synthetic securitisation and will go towards MANAGINGûDIRECTORS ûOVERSEEûTHEûlRM Sû!"&û
3-%ûlNANCING US ABS investment strategy.
RECRUITMENT AGENCY FINANCIER KKR ASSET-BACKED FUND EYES KKR has put about US$150m into the fund
SONOVATE SIGNS £165m ABS DOUBLE-DIGIT YIELDS ALONGûWITHûMONEYûRAISEDûFROMûBANKS û
INSURERS ûASSETûMANAGERS ûPENSIONûFUNDSûANDû
SONOVATE ûAû5+ûCOMPANYûTHATûSPECIALISESûINû KKR SûlRSTûASSET
BACKEDûlNANCEûFUNDûISû SOVEREIGNûWEALTHûFUNDS û)TûISûTARGETINGûFOURû
PROVIDINGûINVOICEûlNANCEûTOûRECRUITMENTû SEEKINGûTOûACHIEVEûDOUBLE
DIGITûYIELDSûEVENû AREASûOFûASSET
BASEDûlNANCE ûCONSUMER
agencies that place temporary workers and ASûMARKETûCONDITIONSûREMAINûCHOPPY ûANDû MORTGAGEûlNANCE ûHARDûASSETS ûSMALL
OTHERûCONTRACTORS ûHASûRAISEDûa Mû the Federal Reserve ratchets up interest MEDIUMûENTERPRISE ûANDûCONTRACTUALû
THROUGHûITSûlRSTûRECEIVABLESûSECURITISATION rates. CASHmOWS
BNP ParibasûWASûTHEûARRANGERûOFûTHEûTWO
++2û!SSET
"ASEDû&INANCEû0ARTNERSûRAISEDû 4HEûFUNDûISûPARTûOFûAû++2ûASSET
BACKEDû
YEARûREVOLVINGûTRANSACTION ûWHILEû- 'û US$2.1bn in committed capital when the lNANCEûSTRATEGYûTHATûHASûDEPLOYEDûMOREû
)NVESTMENTSûPARTICIPATEDûINûTHEûMEZZANINEû THANû53 BNûACROSSû ûINVESTMENTSû
TRANCHEûWITHûAûa MûINVESTMENT û- 'ûISû
ALREADYûAûBACKERûOFûTHEûCOMPANY ûHAVINGûLEDû US ASSET-BACKED SECURITIES GLOBAL CDOs
Aûa MûDEBTûANDûEQUITYûRAISEûINû û BOOKRUNNERS: 1/1/2022 TO DATE BOOKRUNNERS: 1/1/2022 TO DATE
alongside tech entrepreneurs Michael and
Xochi Birch. Managing No of Total Share Managing No of Total Share
bank or group issues US$(m) (%) bank or group issues US$(m) (%)
4HEûISSUERûALSOûWORKEDûWITHû$EMICA ûAû
SUPPLYûCHAINûlNANCEûPLATFORM ûASûADVISERû 1 JP Morgan 71 19,586.25 9.6 1 JP Morgan 15 6,138.70 13.1
and reporting agent. 2 Barclays 65 16,277.42 8.0
3 Wells Fargo 69 15,936.88 7.8 2 Jefferies 14 5,654.57 12.1
Sonovate said the securitisation will allow 4 Bank of America 63 14,366.28 7.1
ITûTOûLENDûMOREûTHANûa BNûAGAINSTûINVOICESû 5 Citigroup 59 14,195.58 7.0 3 Bank of America 14 5,394.10 11.5
this year. The company plans to roll over the 6 Credit Suisse 55 13,875.06 6.8
transaction when it matures. 7 RBC 53 12,245.53 6.0 4 Wells Fargo 18 4,547.16 9.7
8 Goldman Sachs 43 10,853.08 5.3
“We’re very much looking at this as a 9 Deutsche Bank 52 10,358.16 5.1 5 Credit Suisse 10 4,418.96 9.4
LONG
TERMûPARTNERSHIPûTHATûWILLûHELPûUSûTOû 10 Morgan Stanley 28 8,055.61 4.0
keep delivering value in our market and as 314 203,079.38 6 Goldman Sachs 13 4,288.44 9.2
WEûGROW ûBROADENûOURûSCOPEûINûOFFERINGûOURû Total
7 Deutsche Bank 7 3,487.76 7.4
8 Morgan Stanley 11 2,682.30 5.7
9 Citigroup 6 2,611.59 5.6
10 Barclays 8 2,354.83 5.0
86 46,867.62
Total
Excludes MBS. SDC code: F14 Including Euro, foreign, global, US domestics. SDC code: B12
Source: Refinitiv Source: Refinitiv
ALL EUROMARKET CDOs GLOBAL STRUCTURED FINANCE IN US$ STRUCTURED FINANCE – ALL INTL ISSUERS
BOOKRUNNERS: 1/1/2022 TO DATE BOOKRUNNERS: 1/1/2022 TO DATE BOOKRUNNERS: 1/1/2022 TO DATE
Managing No of Total Share Managing No of Total Share Managing No of Total Share
bank or group issues US$(m) (%) bank or group issues US$(m) (%) bank or group issues US$(m) (%)
1 JP Morgan 14 5,641.51 14.9 1 JP Morgan 136 55,849.43 11.7 1 Bank of America 70 17,258.63 9.4
2 Jefferies 13 5,554.57 14.7 2 Bank of America 134 46,181.24 9.7 2 Barclays 97 16,744.96 9.1
3 Credit Suisse 10 4,418.96 11.7 3 Citigroup 123 42,765.54 9.0 3 Credit Suisse 85 15,616.32 8.5
4 Goldman Sachs 11 3,870.59 10.2 4 Goldman Sachs 125 42,062.70 8.8 4 Citigroup 65 15,526.28 8.5
5 Bank of America 8 2,908.84 7.7 5 Wells Fargo 127 40,973.66 8.6 5 Morgan Stanley 61 11,642.11 6.4
6 Wells Fargo 11 2,625.34 6.9 6 Credit Suisse 132 36,631.44 7.7 6 Goldman Sachs 55 10,545.43 5.8
7 Citigroup 6 2,611.59 6.9 7 Morgan Stanley 114 32,944.97 6.9 7 JP Morgan 48 9,901.58 5.4
8 Barclays 7 2,178.11 5.8 8 Barclays 132 28,796.58 6.1 8 Wells Fargo 41 9,129.52 5.0
9 Morgan Stanley 8 2,010.04 5.3 9 Deutsche Bank 90 16,599.85 3.5 9 Deutsche Bank 62 7,679.99 4.2
10 BNP Paribas 3 1,365.78 3.6
67 37,880.20 10 Mizuho 44 14,144.55 3.0 10 BNP Paribas 32 5,707.55 3.1
Total Total 778 475,740.44 Total 365 183,248.01
Excludes global and domestic. Including securitisations (Euro, foreign, global and domestics, excluding Includes securitisations, PFI bonds, self-funded issues and credit-linked
CDOs) and PFI bonds. notes. Excludes US global ABS/MBS and CDOs.
Source: Refinitiv SDC code: J11 Source: Refinitiv SDC code: B16b Source: Refinitiv SDC code: J10c
International Financing Review July 23 2022 35
GLOBALLYûSINCEû ûTHROUGHûACQUISITIONS û INûTHEûWAKEûOFûDATAûSUGGESTINGûTHATûINmATIONû
YEARû7!,S ûPRICEûTALKûISû BPn BPû
platform investments and structured EXPECTATIONSûANDûTHEûJOBSûMARKETûAREûCOOLING û AREAûANDû BPûOVERûONE
MONTHû""37
investments. bankers and investors said.
'UIDANCEûFORûTHEû! MûOFû#LASSû! û
!SSET
BACKEDûlNANCINGûFROMûPRIVATEû 4HEû53ûASSET
BACKEDûPRIMARYûSAWû ! MûOFû#LASSû" û! MûOFû#LASSû#ûANDû
credit players such as KKR has been 53 BNûOFûNEWûPAPERûPRINTEDûINûTHEû ! MûOFû#LASSû$ûNOTES ûWITHû û û û
growing as banks have been reducing their WEEKûTOû*ULYû ûMARKINGûITSûBUSIESTûOFû ANDû
YEARû7!,S ûISûINûTHEû BPûAREA û
footprint in this part of the lending ûSOûFARûASûBANKERSûANDûISSUERSûFRONT
BPûAREA û BPûAREAûANDû BPûAREA û
market. loaded deals ahead of the industry
GATHERING û)TûWASûTHEûHEAVIESTûSUPPLYûSINCEû 4HEû! MûOFû#LASSû%ûANDû! MûOFû
-EANWHILE ûTHEûMARKETûENVIRONMENTû 53 BNûPRICEDûINûTHEûWEEKûTOû #LASSû&ûNOTESûAREûNOTûAVAILABLE ûWHILEûTHEû
HASûBEENûCHALLENGINGûFORû!"3ûASûTHEû&EDû 3EPTEMBERû û ûACCORDINGûTOû)&2ûDATA ! MûOFû%QUITYû ûANDû! MûOFû%QUITYû û
RAISESûRATES ûUSEDûCARûPRICESûRETREATûFROMû notes are retained.
THEIRûRECORDûHIGHS ûANDûTHEûPACEûOFûHOMEû ASIA-PACIFIC MBS
appreciation begins to slow from last Respective credit support for the Class
year’s fast clip. ! ûTOû%QUITYû ûNOTESûISû û û û
û û û ûANDû
US ABS SUPPLY RESUMES LA TROBE SETS GUIDANCE
4HEû"LACKSTONE
BACKEDûLENDERûISSUEDûITSû
Following a pause in issuance during .ON
BANKûLENDER LA TROBE FINANCIAL released THûNON
CONFORMINGû2-"3 ûTHEûNO
GROWû
3&6EGASû ûTHEûSECURITISATIONûINDUSTRY Sû last week guidance for the indicative ! BNû,Aû4ROBEû&INANCIALû#APITALû
BIGGESTûCONFERENCEûONû*ULYû n ûATTENDEDû ! MûNON
CONFORMINGû2-"3ûOFFERING û -ARKETSû4RUSTû
ûORû,&#-4û
ûINû
BYûMOREûTHANû ûISSUERS ûBANKERS û LA TROBE FINANCIAL CAPITAL MARKETS TRUST 2022-1. *ULYûLASTûYEAR
INVESTORSûANDûOTHERûMARKETûPARTICIPANTS û
marketing of new deals resumed with NAB is arranger and joint lead manager MACQUARIE TO REFINANCE
more than US$500m of transactions set for with Citigroup ûCBA ûHSBC ûMacquarie û 2017-1 A NOTES
pricing this week. Natixis ûUOB and Westpac for the
TRANSACTION ûEXPECTEDûTOûLAUNCHûANDûPRICEû MACQUARIE SECURITISATION has mandated
4HEûAMOUNTûOFû!"3ûISSUANCEûISûTEMPEREDûBYû this week. Macquarie BankûTOûMARKETûAûRElNANCINGûOFû
some uncertainty whether the Federal Reserve the PUMA SERIES 2017-1û2-"3û#LASSû!ûNOTES û
may consider dialing back its rate hike regime &ORûTHEû! MûOFû#LASSû! 3ûANDû which is expected to total less than
! MûOFû#LASSû! ,ûNOTES ûWITHû ûANDû ! M
GLOBAL BOND SUMMARY DETAILS: WEEK ENDING 22/7/2022
Pricing date Issuer Amount Maturity Coupon (%) Reoffer Spread (bp) Yield (%)
SSAR IFFIm vaccine bond £250m Jun 7 2025 2.75 99.975 G+93 2.742
STERLING
Jul 19 2022 1.5 101.531 MS+3 1.213
SWISS FRANCS City of Berne SFr30m incr Feb 25 2028 2 80.7 EFP+68 4.28
Jul 18 2022 (SFr185m) 4.25 99.915 MS+29 4.269
3.2 93.989 ASW+46 4.223
NON CORE TCorp A$1.5bn incr Mar 8 2033
Jul 20 2022 (A$6.067bn)
Jul 29 2027
Jul 20 2022 World Bank SDB NZ$800m May 25 2029
Jul 21 2022 Rentenbank
A$100m incr
(A$650m)
CORPORATES AutoZone US$750m Aug 1 2032 4.75 99.905 T+175 4.762
US DOLLARS 4 100 T+75 4
Jul 19 2022 4.15 99.87 T+100 4.179
4.4 99.281 T+145 4.49
Jul 20 2022 IBM US$1bn Jul 27 2025 4.9 98.608 T+180 4.99
4.239 100 T+100 4.239
Jul 20 2022 IBM US$750m Jul 27 2027 4.142 100 T+90 4.142
4.372 100 T+120 4.372
Jul 20 2022 IBM US$750m Jul 27 2032 4.1 99.938 T+120 4.108
4.5 99.351 T+145 4.54
Jul 20 2022 IBM US$750m Jul 27 2052 4.65 95.63 T+180 4.89
Jul 20 2022 NTT Corp US$500m Jul 25 2025
Jul 20 2022 NTT Corp US$500m Jul 26 2024
Jul 20 2022 NTT Corp US$500m Jul 27 2027
Jul 21 2022 CSX US$950m Nov 15 2032
Jul 21 2022 CSX US$900m Nov 15 2052
Jul 21 2022 CSX US$150m incr Mar 3 2068
(US$500m)
36 International Financing Review July 23 2022
BONDS SUMMARY DETAILS
PEPPER GETS OVER THE LINE tighter than initial guidance and 10bp of the year from their record lows seen in
INSIDEû2ED:ED SûEQUIVALENTûTRANCHES March as borrowers adjust to higher
.ON
BANKûLENDER PEPPER MONEYûlNALLYûGOTûITSû MORTGAGEûREPAYMENTS û(OWEVER ûITûNOTESû
LATESTûNON
CONFORMINGû2-"3ûOFFERINGûAWAYû 4HEû! MûOFû#LASSû%ûANDû! MûOFû THATûhREPAYMENTûBUFFERSûANDûHIGHûPRE
ONû7EDNESDAY ûTHEû! Mû 53 M û #LASSû&ûNOTESûCLEAREDûATû BPûANDû BP ûINû payment rates during the pandemic have
PEPPER PRS33 ûAGAINSTûAûSTILLûCHALLENGINGû LINEûWITHû2ED:ED REDUCEDûAVERAGEûLOANûSIZESûACROSSûMANYû
market backdrop. PRIMEûVINTAGESv
2ESPECTIVEûCREDITûSUPPORTûFORûTHEû#LASSû! û
Not only was the transaction delayed by TOû&ûNOTESûISû û û û û û S&P played down the impact of
AûWEEK ûTHEûISSUEûSIZEûWASûHALVEDûFROMûTHEû ûANDû DECLININGûHOUSEûPRICESûINûRECENTûMONTHS û
INITIALûINDICATIVEû! BN
EQUIVALENTû NOTABLYûINûTHEûPREVIOUSLYûHIGH
mYINGû
TRANSACTION ûWHICHûINCLUDEDûAû 4HEûTRANSACTIONûWASûCOMPLETEDûBYû! Mû Sydney and Melbourne markets.
SUBSEQUENTLYûDROPPEDû53ûDOLLARûSENIORû OFû#LASSû' ûNOTESûANDû! MûOFûRETAINEDû#LASSû
tranche. ' ûNOTES “Cooling property prices do not pose a
SIGNIlCANTûRISKûFORûMOSTûBORROWERS ûGIVENû
NAB was arranger and joint lead 0EPPERûISSUEDûTHEû! Mû0EPPERû023 û THEûBUILD
UPûINûEQUITYûANDûMODESTûLOAN
TO
manager with CBA, Macquarie, Standard NON
CONFORMINGû2-"3ûONû-ARCHû ûWHENû value ratios across the broader RMBS
Chartered and Westpac for the securitisation. THEû#LASSû!
S û!
!5ûANDû! ûNOTESûPRICEDûATû sector as well as a stable employment
BP û BPûANDû BPûOVERûONE
MONTHû OUTLOOK vûTHEûREPORTûSAYS
4HEû! MûOFû#LASSû!
SûANDû! Mû ""37 ûORû BP û BPûANDû BPûINSIDEûTHEû
OFû#LASSû!
AûNOTES ûWITHû ûANDû
YEARû latest trade. 4URNINGûTOûTHEûNON
CONFORMINGû
WEIGHTED
AVERAGEûLIVES ûPRICEDû BPûANDû SECTOR û3 0ûSEESûARREARSûINCREASINGû
BPûWIDEûOFûONE
MONTHû""37 RMBS OUTLOOK ATûAûFASTERûRATEûTHANûPRIMEûARREARS û
S&P released a relatively upbeat assessment hGIVENûTHEûHIGHERûEXPOSUREûTOûCREDIT
This matches the clearing margins for OFû!USTRALIANû2-"3ûONû4UESDAYûASûITûEXPECTSû IMPAIREDûANDûSELF
EMPLOYEDûBORROWERSû
THEûSENIORûNOTESûOFûTHEû2ED:EDû4RUSTû3ERIESû the ratings performance of most RMBS who are more vulnerable to rising
ûNON
CONFORMINGû2-"3ûONû*ULYû tranches to be stable over the coming 12 INTERESTûRATESûANDûINmATIONARYû
MONTHS ûUNDERPINNEDûBYûLOWû PRESSURESv
4HEû0EPPERû! MûOFû#LASSû! û UNEMPLOYMENTûANDûCREDITûSUPPORTûBUILD
UPû
! MûOFû#LASSû" û! MûOFû#LASSû#ûANDû in many transactions. h,ARGERûLOANûSIZESûINûMANYûNON
! MûOFû#LASSû$ûNOTES ûALLûWITHû
YEARû conforming transactions also increase
7!,S ûPRICEDû BP û BP û BPûANDû The ratings agency expects prime RMBS INTEREST
RATEûSENSITIVITY vû3 0ûSAID
BPûWIDEûOFûONE
MONTHû""37 û BPû arrears to increase during the second half
Pricing steps NIP (bp) Book size Ratings Bookrunners Distribution
G+95 area, G+95 - £415m Aa1/AA/AA- Barc/TD -
area, G+93
- -
-- Aa1/-/- ZKB
- -
EFP+67/+69, - - Aaa/AA+/AAA BofA/ANZ/Westpac/UBS -
EFP+68 - -
- Aaa/AAA/- ANZ/CBA/WBC
MS+29 - Aaa/AAA/AAA RBC
ASW+46
T+200/+205, T+175 2 US$3.5bn Baa1/BBB/- BofA/JPM/Truist/USB/WFS -
(the #) 10 US$1.9bn A3/A-/-
10 US$1.7bn A3/A-/- WFS/BNPP/JPM/RBC/Santan -
T+95 area, T+75 10 US$2.1bn A3/A-/-
(the #) 10 US$2.1bn A3/A-/- WFS/BNPP/JPM/RBC/Santan -
15 US$3.9bn A1/A/-
T+120 area, T+100 US$4.3bn A1/A/- WFS/BNPP/JPM/RBC/Santan -
(the #) US$4.4bn A1/A/-
US$2.7bn Baa1/BBB+ WFS/BNPP/JPM/RBC/Santan -
T+165 area, T+145 US$2.4bn Baa1/BBB+
(the #) US$1.1bn Baa1/BBB+ MS/JPM/Nomura/BofA/GS/BNPP/ -
Daiwa/Miz -
T+205 area, T+180 -
(the #) MS/JPM/Nomura/BofA/GS/BNPP/ -
Daiwa/Miz
T+130 area, T+100
MS/JPM/Nomura/BofA/GS/BNPP/
T+120 area, T+90 15 Daiwa/Miz
T+150 area, T+120 13 BofA/Barc/Citi/MS/UBS
T+140 area, T+120 2 BofA/Barc/Citi/MS/UBS -
(the #) 2
0 BofA/Barc/Citi/MS/UBS -
T+170 area, T+145
(the #)
T+195 area, T+180
(the #)
International Financing Review July 23 2022 37
GLOBAL BOND SUMMARY DETAILS: WEEK ENDING 22/7/2022 (CONTINUED)
Pricing date Issuer Amount Maturity Coupon (%) Reoffer Spread (bp) Yield (%)
ASW+123 4.913
NON CORE John Deere Financial Limited A$300m Jul 28 2025 4.9 99.964
Jul 20 2022
4.851 100
FINANCIALS JPMorgan Chase & Co US$3.5bn Jul 25 2028 (Jul 2027) 4.912 100 T+175 4.851
US DOLLARS JPMorgan Chase & Co US$3.5bn Jul 25 2033 (Jul 2032) 4.679 100 T+193 4.912
Jul 18 2022 Morgan Stanley US$2bn Jul 17 2026 (Jul 2025) 4.889 100 T+152 4.679
Jul 18 2022 Morgan Stanley US$2bn Jul 20 2033 (Jul 2032) 4.808 100 T+192 4.889
Jul 18 2022 Wells Fargo US$3bn Jul 25 2028 (Jul 2027) 4.897 100 T+175 4.808
Jul 18 2022 4.827 100
Jul 18 2022 4.948 100 T+195 4.897
5.015 100
Jul 18 2022 Wells Fargo US$3.5bn Jul 25 2033 (Jul 2032) 4.414 100 T+160 4.827
4.596 100
Jul 19 2022 Bank of America US$2bn Jul 22 2026 (Jul 2025) 4.548 100 T+180 4.948
4.967 100
Jul 19 2022 Bank of America US$3bn Jul 22 2028 (Jul 2027) 6.125 98.956 T+200 5.015
4.85 99.908
Jul 19 2022 Bank of America US$5bn Jul 22 2033 (Jul 2032) T+20 4.414
4.5 99.816
Jul 19 2022 Bank of New York Mellon US$1.25bn Jul 24 2026 (Jul 2025) T+148 4.596
4.74 100
Jul 19 2022 Bank of New York Mellon US$500m Jul 26 2030 (Jul 2029) 105 100 T+140 4.548
T+195 4.967
Jul 19 2022 U.S. Bancorp US$1.75bn Jul 22 2028 (Jul 2027) 3.75 99.941 T+320 6.372
Jul 19 2022 U.S. Bancorp US$1.3bn Jul 22 2033 (Jul 2032)
Jul 20 2022 Imperial Brands Finance US$1bn Jul 27 2027 100 T+170 4.871
Jul 20 2022 Nationwide BS US$850m Jul 27 2027 99.688
EUROS Aareal Bank green SP €500m Jul 25 2025 MS+300 4.567
Jul 19 2022
NON CORE
Jul 21 2022 SMBC Sydney A$100m Jul 28 2026 ASW+105 4.74
A$150m Jul 28 2026 3mBBSW+105 -
Jul 21 2022 SMBC Sydney
COVERED BONDS
US DOLLARS
Jul 18 2022 BMO US$2.5bn Jul 25 2025 SOFR MS+79 3.771
SOFR MS+79 3.815
Jul 19 2022 Toronto-Dominion Bank US$2bn Jul 25 2025 3.815
Feb 28 2028 1.75
EUROS LBBW €1bn MS+5 1.81
Jul 18 2022
Jul 19 2022 PBB €750m Mar 1 2027 1.75 99.872 MS+6 1.78
Jul 20 2022 Jul 28 2025 1.707 100 MS+17 1.707
Toronto-Dominion Bank €2.5bn
NON CORE Toronto-Dominion Bank A$1.55bn Jul 28 2025 3mBBSW+90 100 3mBBSW+90 -
Jul 21 2022 Toronto-Dominion Bank A$850m Jul 28 2025 4.5 99.847 ASW+90 4.555
Jul 21 2022 Camelot Finance (Camelot US$710m Aug 1 2028 (Aug 2024) 8.75 90.296 - 11
Return Merger Sub) Jun 1 2027 (Jun 2025) 10.5 94.585 T+892 12.008
HIGH YIELD
US DOLLARS FTAI Infra Escrow Holdings / US$50m incr
Jul 20 2022
Jul 21 2022
FTAI Infrastructure (US$500m)
38 International Financing Review July 23 2022
BONDS SUMMARY DETAILS
Pricing steps NIP (bp) Book size Ratings Bookrunners Distribution
- - A2/A/A DB/StCh -
ASW+130 area,
ASW+123 -
-
T+195 area, T+175 10 US$6.1bn A2/A-/AA- JPM -
9 US$11bn A2/A-/AA- JPM -
T+215 area, T+193 2 US$7.5bn A1/A-/A MS/MUFG -
2 US$10bn A1/A-/A MS/MUFG -
T+175 area, T+152 7 US$4.5bn A1/BBB+/A+ WFS -
US$7bn
T+215 area, T+192 4 US$11.4bn A1/BBB+/A+ WFS -
US$3bn
T+200 area, T+175 7 US$2.8bn A2/A-/AA- BofA -
(the #) US$4.2bn
4 US$4.8bn A2/A-/AA- BofA -
T+215/+220, T+195 US$3.5bn
(the #) 5 US$1.2bn A2/A-/AA- BofA -
T+180 area, T+160 6 €700m A1/A-/AA-/AA BofA/CS/MS/BNY -
(the#)
8 - A1/A-/AA-/AA BofA/CS/MS/BNY -
T+205 area, T+180 -
(the #) 20 A2/A+/- Barc/GS/USB -
5 US$2.75bn A2/A+/- Barc/GS/USB -
T+225 area, T+200 50 Baa3/BBB/- BofA/HSBC/Miz/MUFG/Santan/ -
(the #) - WFS
23 A1/A+/A+ BofA/GS/JPM/MS -
T+145 area, T+120 €4.6bn
(the #)
€1.25bn
T+175 area, T+148
(the #) €3.25bn, 125acs
T+165 area, T+140 -
-
T+225 area, T+195
-
T+350 area, T+320 -
(the #)
T+190 area, T+170
(the #)
MS+300 area, - A3/NR/A-/ BNPP/Citi/Deka/DB/DZ/HSBC -
MS+300
Sustainalytics:2PO -
-
ASW+105 - A1/A/A CBA
3mBBSW+105 - A1/A/A CBA
SOFR MS+82 area, - Aaa/NR/AAA/AAA BMO/HSBC/Lloyds/StCh/TD/UBS -
SOFR MS+80 area - Aaa/NR/NR/AAA TD/Citi/Scotiabank/StCh/UBS/WFS -
(+/-1), SOFR MS+79
SOFR MS+80 area,
SOFR MS+79
MS+10 area, MS+6 - Aaa/-/-/ ING/LBBW/Natx/Nordea/Santan/ -
area (+/-1 WPIR), Sustainalytics:Low Uni -
MS+5 risk, ISS ESG:C+,
MSCI:AA, CMZ/LBBW/Natx/NordLB/Santan
MS+10 area, MS+7 - IMUG:Good
area (+/-1 WPIR), 12
MS+6 Aa1/-/-
MS+20 area, MS+17, Aaa/NR/NR/AAA Danske/DZ/ING/Natx/TD/Uni Ger/Aus/Switz 50%,. Benelux 18%, UK/
B+105 Ire 12%, Fr 9%, Nordics 6%, Other 5%.
Bks 47%, AM 27%, CB/OI 18%, Ins/PF
3mBBSW+93 area, - Aaa/-/-/AAA ANZ/DBS/CBA/NAB/TD/WBC 6%, Other 2%.
3mBBSW+90 - Aaa/-/-/AAA ANZ/DBS/CBA/NAB/TD/WBC
-
ASW+93 area,
ASW+90 -
11% area, 11% - B2/B/- DB/UBS/Barc/BNPP/RBC/SG/GS/ -
- - B2/B/- Natx/Jeff -
Barc/MS
International Financing Review July 23 2022 39
GLOBAL DEBT: SOVEREIGN FOREIGN CURRENCY LONG-TERM RATINGS (22/7/2022)
Sovereign Moody’s S&P Fitch Moody’s Ceiling S&P Fitch Ceiling
Rating Ceiling Rating Ceiling Rating Ceiling Sovereign Rating Ca Rating Ceiling Rating CCC
C – SD CC RD B+
Abu Dhabi Aa2 – AA AA+ AA AA+ Lebanon – Aaa –– Bn –
Albania B1 Ba2 B+ BB – – Lesotho – Aaa AAA AAA – AAA
Andorra Baa2 A1 BBB p AAA A– AA– Liechtenstein A2 Aaa A+ AAA A AAA
Angola B3 B3 B– B– B– B– Lithuania Aaa Aaa AAA AAA AAA AAA
Argentina Ca Caa3 CCC+ A CCC B– Luxembourg Aa3 – –– AA –
Armenia Ba3 n Ba1 B+ BB– B+ BB– Macau – Aa2 B– p B– – A
Aruba – – BBB BBB BB BB+ Madagascar A3 B3 A– A+ BBB+ B
Australia Aaa Aaa AAA AAA AAA AAA Malaysia Caa1 Caa1 –– B– –
Austria Aa1 Aaa AA+ p AAA AA+ AAA Maldives Caa2 n Aaa –– – AAA
Azerbaijan Ba2 p Ba2 BB+ BB+ BB+ BB+ Mali A2 n A1 A– AAA A+ –
Bahamas Ba3 n Baa3 B+ BB– – – Malta Baa2 n A1 –– – BBB+
Bahrain B2 B1 B+ BB– B+ BB+ Mauritius Baa2 B2 BBB A BBB– –
Bangladesh Ba3 Ba2 BB– BB– BB– BB– Mexico B3 n B3 –– – B+
Moldova B3 Baa3 B B+ B –
Barbados Caa1 B3 B– B– – – Mongolia B1 – B AAA – –
Belarus Ca n Ca CC n CC RD d B– Montenegro – Baa2 BBB– BBB– – BB+
AA– Montserrat Ba1 Caa1 BB+ BBB BB+ B–
Belgium Aa3 Aaa AA AAA – AAA Morocco Caa2 p Ba1 CCC+ CCC+ CCC BB
Belize Caa3 Caa2 B– B– B+ – Mozambique B1 Aaa –– BB– AAA
Benin B1 Ba1 B+ BBB– – BB– Namibia Aaa Aaa AAA AAA AAA AAA
Bermuda A2 Aaa A+ AA+ B – Netherlands Aaa B2 AA+ AAA AA p B–
Bolivia B2 n B2 B+ n B+ – B New Zealand B3 B1 B– B– B– –
Bosnia Herzegovina B3 B3 B BB– – – Nicaragua B3 B2 –– – B
Botswana A3 A1 BBB+ A BB– – Niger B2 – B– B– B BBB–
Brazil Ba2 Baa2 BB– BB+ BBB BB Nigeria – Aaa BB– BB BB+ n AAA
Bulgaria Baa1 Aa2 BBB A – A– North Macedonia Aaa Ba2 AAA AAA AAA BB+
Burkina Faso – – CCC+ BBB– – – Norway Ba3 B3 BB– BB BB– B–
Cambodia B2 B1 – – B – Oman B3 n B– B– B– n d
Cameroon B2 B1 B– BBB– AA+ B+ Pakistan A1 BBB– A–
Canada Aaa Aaa AAA AAA B– AAA Baa2 B1 BBB n AAA – –
Cape Verde – – B– B+ – B Panama B2 n Baa2 B– B– BB+ BB+
Cayman Islands Aa3 Aaa – – A– – Papua New Guinea Ba1 Aa3 BB BB+ BBB BBB+
Chile A1 n Aaa A AA– A+ A+ Paraguay Baa1 A2 BBB A– BBB n BBB+
China A1 Aa1 A+ A+ BB+ A+ Peru Baa2 Aa1 BBB+ A– A– AA–
Colombia Baa2 A1 BB+ BBB – BBB– Philippines A2 Aa2 A– A+ BBB AA
Congo (DR) Caa1 p Caa1 B– B– CCC – Poland Baa2 Aa1 BBB AAA AA– AA
Congo (Rep) Caa2 Caa1 CCC+ BBB– – B– Portugal Aa3 – AA– AA Ap AA+
Cook Islands – – B+ AAA B – Qatar – A2 A– AA+ BBB– n BBB+
Costa Rica B2 Ba3 B BB– BB– B+ Ras Al Khaimah Baa3 W BBB– A– W W
Cote d’Ivoire Ba3 p Baa3 BB– BBB– BBB+ BB Romania W B1 WW B+ n B+
Croatia Baa2 c Aa2 c BBB– BBB+ AA+ Russia B2 n B2 B+ n B+ – –
Ca Ca – Rwanda B3 – –– BB+ BBB
Cuba – – – – – – St Vincent & Gren – Aa2 –– Ap A+
Curacao Ba1 A1 BBB– BBB– BBB– – San Marino A1 Baa3 A– p A – –
Cyprus Aa3 Aaa BBB– p AAA AA– A Saudi Arabia Ba3 Baa2 B+ BBB– BB+ BBB–
Czech Rep Aaa Aaa AA– AA+ AAA AAA Senegal Ba2 – BB+ p BBB– B+ BB+
Denmark Ba3 Ba1 AAA AAA BB– AAA Serbia – – –– – –
Dominican Rep Caa3 Caa2 BB– BB+ B– BB– Seychelles Baa3 n Aaa BBB– n AA+ AAA AAA
Ecuador B2 n Ba3 B– B– B+ B– Sharjah Aaa Aaa AAA AAA A AAA
Egypt Caa3 n Caa1 B B CCC B+ Singapore A2 Aaa A+ n AAA A AAA
El Salvador A1 Aaa CCC+ AAA AA– B– Slovakia A3 B3 AA– AAA – –
Estonia B3 B1 AA– AAA – AAA Slovenia Caa1 Baa2 –– BB– BB
Eswatini Caa2 n Caa2 – – CCC – Solomon Islands Ba2 Aaa BB– p BB+ AA– AA+
Ethiopia B1 n B1 CCC n CCC – B– South Africa Aa2 Aa1 AA AAA A– AAA
Fiji Aa1 Aaa B+ B+ AA+ – South Korea Baa1 Ca A AAA RD B–
Finland Aa2 Aaa AA+ AAA AA n AAA Spain Ca Caa2 SD CC – –
France Caa1 B3 AA AAA B– AAA Sri Lanka Caa3 n Aaa SD CCC AAA AAA
Gabon Ba2 n Baa3 – – BB B Suriname Aaa Aaa AAA AAA AAA AAA
Georgia Aaa Aaa BB BBB– AAA BBB– Sweden Aaa Aaa AAA AAA AA AAA
Germany Caa1 B2 AAA AAA B– AAA Switzerland Aa3 p B3 AA+ AAA – –
Ghana Ba3 A3 B– B BB B– Taiwan B3 B1 B– B– – –
Greece Ba1 Baa3 BB+ AAA BB– BBB+ Tajikistan B2 A1 –– BBB+ A–
Guatemala B1 Ba3 BB– p BB+ – BB Tanzania Baa1 Ba1 BBB+ A – –
Honduras Aa3 Aaa BB– BB AA– – Thailand Ba2 BBB–** c BBB
Hong Kong Baa2 A1 AA+ AAA BBB AAA Trinidad & Tobago B3 –– CCC B–
Hungary A2 Aa2 BBB A– A A Caa1 n B2 B+ n B+ Bn B
Iceland Baa3 A3 A A BBB– A+ Tunisia B2 n – –– B+ B+
India Baa2 A3 BBB– BBB+ BBB BBB– Turkey – – BBB+ AAA – –
Indonesia Caa1 Caa1 BBB BBB+ B– BBB Turkmenistan – Ba3 BB B+ n B+
Iraq A1 p Aaa B– B– AA– B– Turks & Caicos B2 Caa2 CCC+ n CCC+ CCC B–
Ireland A1 p Aaa AA– AAA A+ AAA Uganda Caa3 n Aaa –– AA– AA+
Israel Baa3 Aa3 AA– AA+ BBB AA Ukraine Aa2 Aaa AA AAA AA– AAA
Italy B2 Ba3 BBB p AAA B+ AA UAE Aa3 Aaa AA+ AAA AAA n AAA
Jamaica A1 Aaa B+ BB– A BB– UK Aaa A2 BBB A– BBB– BBB+
Japan B1 Ba1 A+ AA+ BB– AAA USA Baa2 B1 BB– BB– BB– BB–
Jordan Baa2 Baa1 B+ BB BBB BB Uruguay B1 p C –– – –
Kazakhstan B2 n Ba3 BBB– BBB B+ n BBB+ Uzbekistan C Ba2 BB+ BB+ BB p BB
Kenya A1 Aa2 B B+ AA– B+ Venezuela Ba3 p Caa3 SD CCC+ RD B–
Kuwait B3 B3 A+ n AA– – AA+ Vietnam Ca
Kyrgyzstan Caa3 Caa3 – – CCC – Zambia
Laos A3 Aaa – – A– B–
Latvia A+ AAA AAA
p Positive outlook/on watch c Improvement in ratings, N New rating * Taken off positive watch/outlook
for upgrade outlook or watch status W Rating withdrawn ** Taken off negative watch/outlook
SD Selective default
n Negative outlook/on watch d Deterioration in ratings, RD Rating default
for downgrade outlook or watch status
40 International Financing Review July 23 2022
EMERGING MARKETS
China 42 South Korea 42 Belarus 43 Russia 43 Zambia 43 Israel 44 Argentina 45 Mexico 46
FRONT STORY ASIA
Asian issuers catch calm window
Busy week produces US$4.4bn of US dollar trades as FOMC looms
Issuers still need to pay up but investors have cash to deploy
A string of Asian issuers last week took &EDERALû2ESERVEûOFlCIALSûCALLEDûFORûAû Lenovo as not just a Chinese company but a
advantage of more benign market balanced rise, with much of the market now global one.”
conditions and improved risk sentiment to pricing in a 75bp increase this week.
raise close to US$4.4bn ahead of this week’s Despite improved risk sentiment, issuers
US Federal Open Market Committee The banker said supply in the primary are still acquiescing to investors’
meeting. market this week would shrink to minimal expectations for new issue concessions to
volumes as issuers will seek to avoid compensate for future federal rate increases
Wednesday proved to be very active with volatility. and potential market weakness. TSMC was
the window wide open for three benchmark reckoned to have paid a new issue
trades from LENOVO GROUP, KOREA HYDRO AND TAIWAN SEMICONDUCTOR MANUFACTURING lREDû concession of about 30bp against its
NUCLEAR POWER and ZHANGZHOU JIULONGJIANG THEûlRSTûSALVOûONû4UESDAYûWITHûAû53 BNûlVEû previous SEC-registered deal but this
GROUP. and 10-year offering that priced at Treasuries premium narrowed to 10bp–15bp when
plus 125bp and 173bp, respectively. adjusted for the new deal in 144A format.
“This has been a bright spot in recent Lenovo conceded 10bp–15bp in its trade.
weeks as it shows that investors are still The stable window stayed open for Lenovo
putting their money to work, even though on Wednesday and it priced its US$625m 5.5- “KHNP was a good trade
they have been very selective this year and year conventional and US$625m 10-year despite the increase in supplies
are being prudent on pricing and tenors, as green bond at Treasuries plus 265bp and this week but investors are
many funds are sitting on losses,” said a 350bp, respectively, while KHNP raised now very keen on high-quality
DCM banker. 53 MûFROMûlVE
YEARûSENIORûUNSECUREDû names and the Korean issuer
144A/Reg S bonds at Treasuries plus 123bp, with a Double A rating fits that
“After the US CPI figure was tightening from the initial 150bp area. profile well”
printed the week before
showing inflation slowing down “TSMC’s deal was trading a few basis KHNP paid about 15bp–20bp in new issue
in June, market conditions have points tighter on Wednesday, providing a premium, using the recent issuance from
improved with equities rallying clear window for us to proceed with the South Korean generation companies as
and risk appetite increasing, deal,” said a banker on the Lenovo comparables. The KHNP notes opened
allowing the primary market to transaction. slightly wider the following day but ended
reopen” the day about 5bp tighter, while Lenovo
The TSMC, Lenovo and KHNP deals widened 35bp in the morning but recovered
Last week was one of the busiest in the attracted decent support from the US. TSMC slightly by the end of the day, closing about
past two months for US dollar issuance from had 60% of commitments from the US, 5bp–10bp wider.
Asian borrowers, exceeding the week of Lenovo 30% to 40% across two tranches and
June 27 when over US$2.6bn of bonds were KHNP 24%. “KHNP was a good trade despite the
sold by Asian companies. It easily surpassed increase in supplies this week but investors
the previous week’s meagre offering of Zhangzhou Jiulongjiang Group also sold a are now very keen on high-quality names
nearly US$990m and the US$1.7bn sold in US$500m three-year sustainability bond on and the Korean issuer with a Double A rating
the week of July 4. Wednesday at 4.9%. lTSûTHATûPROlLEûWELL vûSAIDûAûBANKERûONûTHEû
deal. The KHNP bonds will be rated Aa2/AA
h!FTERûTHEû53û#0)ûlGUREûWASûPRINTEDûTHEû CHINA THREE GORGES on Thursday printed a (Moody’s/S&P), in line with the issuer’s
WEEKûBEFOREûSHOWINGûINmATIONûSLOWINGû US$300m 3.625% three-year trade at rating.
down in June, market conditions have Treasuries plus 46bp with GUANGZHOU
improved with equities rallying and risk “Asian investors are more cautious before
appetite increasing, allowing the primary DEVELOPMENT DISTRICT INVESTMENT GROUP the FOMC meeting; they don’t want to put in
market to reopen,” said one syndicate large size at the moment,” said a third
banker. “Of course, issuers and investors are wrapping up the week the same day with a banker close to Lenovo’s trade. “Also, I think
still equally cautious because you never US$400m three-year sustainability note at TMT names, like TSMC and Lenovo, are
really know what the FOMC meeting this 4.5%. more favoured by the US investors.”
week will produce.” Kit Yin Boey, Pan Yue
Bankers said Asian investors were still
Earlier expectations for a 100bp spike in FOCUSEDûONûSHORTûDURATIONSûOFûTHREEûTOûlVEû
the US federal rate have eased since various years, with little appetite for longer tenors.
Lenovo broke ranks with its 10-year green
trade, which stood out last week with
demand driven by US investors, especially
insurance companies, which are still able to
take the 10-year bracket.
“Half of the investors in the 10-year
tranche were green funds which helped the
piece get done,” said another banker on the
deal. “It demonstrates that investors see
International Financing Review July 23 2022 41
ASIA-PACIFIC Lenovo makes green debut
CHINA CHINA Computer manufacturer uses ESG help to print 10-year bond
CHINA THREE GORGES SELLS SMALL DEAL Hong Kong-listed LENOVO GROUP has raised Investors were expecting a size of around
US$1.25bn from a 5.5-year conventional tranche US$800m to US$1bn during bookbuilding.
CHINA THREE GORGES has sold a US$300m and a 10-year green portion, the first green bond
3.625% three-year senior bond. from the computer manufacturer. Another banker said the bond was only 5bp
wider early in the morning, but more bondholders
The Reg S note was priced at 99.795 to The ESG label helped it achieve the longer followed to dispose their holdings after seeing
yield 3.698%, or 46bp over Treasuries, tenor at a time when the Asian market remains some big names selling the bond, which reminded
inside initial guidance of the 100bp area. generally duration averse. them of the sell-offs in the Chinese real estate
sector that been led by big investors.
The order book reached US$3.2bn, Both tranches priced at par. The US$625m
including US$1.15bn from the leads, when 5.5-year portion had a yield of 265bp over As a good credit, Lenovo saw the yield climb
lNALûGUIDANCE ûWHICHûWASûTHEûSAMEûASûTHEû Treasuries, which was tightened from initial back by 20bp when the market closed on
lNALûYIELD ûWASûANNOUNCED û guidance of 290bp. The US$625m green bond Thursday.
had a yield of 350bp, inside initial guidance of
The sharp tightening from the initial 370bp. GREEN HELP
GUIDANCEûREmECTEDûTHEûISSUER SûDECISIONûTOû Lenovo announced its green finance framework
pick pricing over size. The leads saw fair value at 250bp for the 5.5- this month, which was set up with this bond
year tranche and 315bp for the 10-year tranche issuance in mind. Another banker close to the
“The issuer has found that funding in US by comparing with the company’s own bonds transaction said the company’s comprehensive
dollars is far more expensive than funding at pre-announcement level, translating to a ESG targets and transparency in disclosure
onshore, which is not surprising given the 15bp and 35bp premium. However, with the won investor trust and attracted ESG-focused
external market conditions roiled by outstanding bonds widening significantly during investors.
interest rate hikes in the US,” said a DCM the week, the premium was at a 10bp to 15bp
banker. level for each tranche when the deal was priced. Lenovo spent Tuesday gathering investor
feedback and giving them time to understand
“The strong demand before guidance “The bookbuilding went okay, we started the green framework. Initially, the company was
WASûlNALISEDûGAVEûITûROOMûTOûSQUEEZEûONû quite late in Asian time, and the order book was considering tenors of 3.5 years, 5.5 years and
pricing. The deal was aimed to access fine at FPG, it was just the last leg that was very 10 years, with the green label potentially to be
offshore markets, and it has succeeded in challenging,” said a banker on the deal. added to any of the tranches. It later decided to
that target.” drop the 3.5-year tenor.
The deal was announced almost at noon on
A CreditSights note said that while Wednesday as the lead banks were late pushing “We decided to put the green label on the 10-
Three Gorges (A1/A+/A) had excellent out initial guidance. The order book built up year tenor to attract investors, because many are
credit fundamentals with the strongest quickly to US$1.1bn by lunchtime and peaked at averse to duration, and with the volatility of the
STANDALONEûPROlLEûAMONGû#HINESEûUTILITIES û US$4.1bn when final guidance was announced. Treasury rate, people don’t want a longer tenor and
THEûlNALûPRICINGûWASûUNATTRACTIVEûATû BPû However, the final orders shrank to US$2.4bn, lose more money later,” said the second banker.
tighter than its outstanding 3.7% 2025s and which bankers blamed on the tight pricing
1.3% 2025s. together with the late timing of the deal, which Proceeds will also support a tender offer
meant some Asian investors did not have enough launched on July 18 to repurchase 4.75% March
Bank of China, Deutsche Bank, JP Morgan, time to make a quick assessment. 2023 notes.
ABC International and DBS Bank were joint
global coordinators. The deal struggled again late on Thursday BNP Paribas, Citigroup, Credit Suisse, DBS
morning, with a 35bp widening. Bankers believed Bank, Goldman Sachs, HSBC, JP Morgan and
Three Gorges Finance I, a wholly owned that was the result of the larger than expected Morgan Stanley were joint global coordinators.
subsidiary of the Chinese hydropower size and panic selling from Asian investors. Pan Yue
producer, was the issuer, while the parent
provided a guarantee.
ALL INTL EMERGING MARKETS BONDS ALL INTL EMERGING MARKETS BONDS SOUTH KOREA
BOOKRUNNERS: 1/1/2022 TO DATE BOOKRUNNERS: 1/1/2022 TO DATE
KT CORP PLANS US DOLLAR BOND
Asia-Pacific No of Total Share Managing No of Total Share
issues US$(m) (%) bank or group issues US$(m) (%) Telecoms company KT CORP, rated A3/A–/A, will
Managing MEETûlXED
INCOMEûINVESTORSûINû!SIA û%UROPEû
bank or group 1 Citigroup 113 22,456.80 9.2 and the US from Monday for a proposed US
2 JP Morgan 91 18,447.11 7.6 dollar senior unsecured bond offering.
1 HSBC 107 10,237.31 7.1 3 HSBC 132 16,092.72 6.6
4 BNP Paribas 71 10,566.79 4.3 BNP Paribas, Citigroup, Credit Agricole CIB,
2 Citigroup 72 9,009.04 6.2 5 Standard Chartered 101 9,540.45 3.9 HSBC and JP Morgan are joint lead managers
6 Bank of America 59 8,089.05 3.3 for the 144A/Reg S deal, which will have an
3 Standard Chartered 88 8,613.78 5.9 7 Deutsche Bank 41 7,995.97 3.3 EXPECTEDûTENORûOFûTHREEûTOûlVEûYEARS û
8 Barclays 31 6,664.90 2.7
4 JP Morgan 46 7,288.60 5.0 9 Credit Agricole 85 6,535.60 2.7 The investor meetings are scheduled to
10 Goldman Sachs 31 6,139.36 2.5 end on July 29 and will overlap the US FOMC
5 BNP Paribas 52 5,756.87 4.0 514 243,462.64 meeting slated for July 26–27, where the US
Total Federal Reserve is expected to announce
6 Credit Agricole 79 5,369.56 3.7 another increase to the Fed funds rate.
7 Mizuho 59 4,766.48 3.3
8 Bank of China 88 4,053.24 2.8
9 Bank of America 39 3,800.95 2.6
10 Citic 108 3,518.49 2.4
Total 386 145,054.62
Excluding equity-related debt. Excluding equity-related debt.
Source: Refinitiv
SDC code: L4 Source: Refinitiv SDC code: L1
42 International Financing Review July 23 2022
EMERGING MARKETS EUROPE/AFRICA
LOTTE PROPERTY GOES GREEN 4HEû"ELARUSIANûlNANCEûMINISTRYûSAIDûONû Alrosa said it intends to pay the interest
July 15 that a similar statement from due in roubles to certain eligible
LOTTE PROPERTY & DEVELOPMENT BEGANûlXED
Moody’s saying Minsk had defaulted on its bondholders under new Russian laws
income inve]stor meetings from Thursday sovereign debt was “provocative” and aimed designed to help companies avoid defaults.
in Asia and Europe for a proposed US ATûCREATINGûANûARTIlCIALûSHOCKûOVERûITSû
dollar offering of three-year green and Eurobonds. Russia’s largest gold producer, POLYUS, has
sustainability bonds. launched a consent solicitation asking holders
Moody’s had said that Belarus’s move to of its three US dollar bonds to let the company
The senior unsecured bonds, to be rated pay Belarusian rubles on its dollar- pay in alternative currencies. It is also seeking
Aa3 by Moody’s, will be guaranteed by denominated bonds constituted a default. to extend the grace period to 30 days.
Kookmin Bank.
“The Belarusian side has made and will SOVCOMBANK redeemed an issue of dollar-
Bank of America, Citigroup, HSBC and make every effort and will do everything denominated Eurobonds maturing in 2025
Mizuho Securities are lead managers on the possible to ensure that these rights of the early in roubles. The bank redeemed the
Reg S-only deal. holders of Eurobonds, who trust the dollar Eurobonds ahead of schedule on July
Republic of Belarus, are exercised on an 18, and also paid the coupon interest
The property developer is owned by ALTERNATIVEûBASIS vûTHEûlNANCEûMINISTRYûSAIDû accrued by this date, a spokesman for the
Lotte Chemical and Lotte Corporation. in a statement. lender told Interfax.
EUROPE/AFRICA RUSSIA ZAMBIA
BELARUS GAZPROM MAKES TIMELY COUNTRY WAITING ANXIOUSLY FOR
SWISS PAYMENT DEBT RELIEF COMMITMENTS
RATINGS AGENCY CALLS
HOUND BELARUS GAZPROM proved itself something of an ZAMBIA’s government is anxiously awaiting
anomaly among Russian issuers on Tuesday ANûOFlCIALûDEBTûRELIEFûCOMMITMENTûFROMûITSû
Fitch has shunted BELARUS into Restricted as it managed to successfully pay back an bilateral creditors, Finance Minister
Default territory from C, following the international bond on time. Situmbeko Musokotwane said on Thursday,
expiry of the 14-day grace period on July as the country seeks to restructure its debts
13 for a coupon payment on the The company paid back its SFr500m after defaulting in 2020, Reuters reported.
sovereign’s US$600m 2027 Eurobond (US$516m) 2.25% note that matured on
issue. Tuesday and the proceeds were sent through Musokotwane said Zambia, which has
to bondholders, according to a person been seeking relief from creditors since it
4HEû"ELARUSIANûMINISTRYûOFûlNANCEû familiar with the matter. A US$1bn 4.95% reached a US$1.4bn staff-level agreement
transferred the funds in Belarusian rubles bond also matured on Tuesday, though there with the International Monetary Fund in
into an account at ASB Belarusbank that WASûNOûIMMEDIATEûCONlRMATIONûONûTHEû December, was waiting to hear whether
could be accessed by the paying agent. status of that payment. creditors would need to meet again.
Fitch said the local currency payment, Russian diamond miner ALROSA intends to Zambia’s bilateral creditors met on
in place of a US dollar payment, was made make a coupon payment on two US$500m Monday and were expected to publicly
under that process on June 29. Eurobonds in roubles, after the sanctioned commit to debt relief during the week,
company was unable to make payment in sources familiar with the situation had told
“This contravenes bond documentation US dollars, the company said on Tuesday in a Reuters.
that does not allow for settlement in statement, Reuters reported.
alternative currencies,” said Fitch. “The “We are at the concluding end of this
PAYMENTûWASûNOTûFULlLLEDûUNDERûTHEû Alrosa said it had “proven technically PROCESSûANDûWEûAREûJUSTûAWAITINGûANûOFlCIALû
original terms and not made by the end of impossible” to service the debt “as a result statement from those creditors,”
the grace period.” of the sanctions imposed” by the United Musokotwane said, referring to debt relief
States, European Union and Britain on the commitments required by the IMF to unlock
company. lNANCING
ALL INTL EMERGING MARKETS BONDS ALL INTL EMERGING MARKETS BONDS INTERNATIONAL ISLAMIC FINANCE DEBT
BOOKRUNNERS: 1/1/2022 TO DATE BOOKRUNNERS: 1/1/2022 TO DATE BOOKRUNNERS: 1/1/2022 TO DATE
Europe/Africa No of Total Share Middle East No of Total Share Managing No of Total Share
issues US$(m) (%) issues US$(m) (%) bank or group issues US$(m) (%)
Managing Managing
bank or group bank or group
1 Citigroup 17 6,036.28 15.2 1 HSBC 17 2,461.56 11.8 1 Dubai Islamic Bank 8 2,091.94 14.4
2 JP Morgan 17 4,532.20 11.4 2 Citigroup 8 1,665.00 8.0 2 HSBC 6 1,973.61 13.6
3 Deutsche Bank 9 4,164.57 10.5 3 JP Morgan 9 1,634.00 7.8 3 Standard Chartered 10 1,629.05 11.2
4 Goldman Sachs 9 3,614.09 9.1 4 Standard Chartered 13 1,516.53 7.3 4 Kuwait Finance 5 1,123.61 7.8
5 BNP Paribas 10 3,170.63 8.0 5 Credit Suisse 5 1,130.63 5.4 5 Citigroup 3 1,052.78 7.3
6 HSBC 7 2,178.17 5.5 6 First Abu Dhabi Bk 9 1,081.26 5.2 6 Deutsche Bank 3 949.61 6.6
7 ING 6 1,845.25 4.7 7 Barclays 5 1,076.35 5.2 7 Gulf Fin House EC 1 900.00 6.2
8 Erste Group 11 1,823.64 4.6 8 Abu Dhabi Com Bk 6 775.11 3.7 8 CIMB Group Hold 1 650.00 4.5
9 Societe Generale 7 1,207.64 3.0 9 Emirates NBD 9 667.50 3.2 9 Emirates NBD 6 405.44 2.8
10 Barclays 5 1,070.12 2.7 10 Robert W Baird & Co 3 650.74 3.1 10 Saudi National Bank 3 365.28 2.5
44 39,666.36 41 20,875.89 13 14,496.88
Total Total Total
SDC code: L2
Excluding equity-related debt. Excluding equity-related debt. SDC code: L5 Excluding equity-related debt. SDC code: J27
Source: Refinitiv Source: Refinitiv Source: Refinitiv
International Financing Review July 23 2022 43
GLOBAL EMERGING MARKETS BOND DETAILS: WEEK ENDING 22/7/2022
Pricing date Issuer Amount Maturity Coupon (%) Reoffer Spread (bp) Yield (%)
ASIA Xinzhan US$115m Jul 21 2023 6.5 100 - 6.5
Jul 18 2022 US$400m Jul 22 2027 4.375 99.951 T+125 4.386
Jul 19 2022 Taiwan Semiconductor 4.625 99.124 T+173 4.736
Manufacturing Co US$600m Jul 22 2032 5.831 100 T+265 5.831
Jul 19 2022
Taiwan Semiconductor US$625m Jan 27 2028 6.536 100 T+350 6.536
Jul 20 2022 Manufacturing Co
4.7 99.448 - 4.9
Lenovo Group
Jul 20 2022 Lenovo Group US$625m Jul 27 2032
Jul 20 2022 Zhangzhou Jiulongjiang US$500m Jul 27 2025
Group
Jul 19 2022 Citic Pacific US$100m incr Feb 17 2027 2.875 94.493 - 4.22
Jul 20 2022 (US$800m) Jul 27 2027 4.25 99.355 T+123 4.395
Korea Hydro and Nuclear 3.625 99.795 T+46 3.698
Jul 20 2022 Power US$700m
4.5 100 - 4.5
Three Gorges US$300m Jul 27 2025
Jul 21 2022 Guangzhou Development US$400m Jul 28 2027
Zone Investment Group Co
EMEA Bank Leumi Le Israel US$500m Jul 27 2027 5.125 99.34 T+210 5.277
Jul 20 2022 America Movil 4.7 99.88 T+175 4.715
US$750m Jul 21 2032
LATAM
Jul 18 2022
“We are very anxious and waiting to see MIDDLE EAST where the dollar market currently offers
what will happen,” he said, during an comparable funding versus shekels.”
African Union meeting in Lusaka ISRAEL
discussing rising debt levels in Africa. ,EUMIûHADûBEENûTHEûlRSTûLENDERûFROMû
BANK LEUMI MARKS ISRAELI FIRST Israel to sell international bonds, when it
)Nû û:AMBIAûBECAMEûTHEûlRSTû placed a US$750m Tier 2 note issue in
African country to default in the BANK LEUMI proved demand on Wednesday 2020. It was followed into international
pandemic era, struggling with external for high-rated CEEMEA credit risk with a markets by Tier 2 deals from Mizrahi and
debts that reached US$17.27bn at the end 53 MûlVE
YEARûNOTEûISSUEûTHATûWASûTHEû Hapoalim. But the lack of senior
of last year, according to government lRSTûBYûANû)SRAELIûLENDERûINûSENIORû unsecured issuance gave Wednesday’s
data. unsecured format. TRADEûAûSTRONGûPRICEûDISCOVERYûmAVOUR
Pledges from creditors that bring its The bank (A2/A/A), which is Israel’s Leumi opened books marketing
debt down to levels the IMF deems largest by assets and market the benchmark at Treasuries plus
sustainable are needed before the Fund capitalisation, was drawn into 235bp area.
will sign off on the three-year extended international waters by the opportunity
credit facility. to diversify its funding base and “It’s actually tighter versus where I
favourable moves in the basis swap. thought it would come at IPTs,” said a
When asked by reporters how banker away from the deal. “That being
CONlDENTûHEûWASûTHATûTHEûCREDITORSûWOULDû “There is a really active shekel market, said, I had a rationale that would get me
give Zambia the green light, and the basis swap historically has been to 225bp and one that would get me to
Musokotwane expressed optimism. such as to make the dollar market very 325bp.”
expensive,” said a lead. “Over recent
He said that the IMF and World Bank weeks and months, with the dislocations A second banker away from the deal
had been urging the creditors to provide in the market, we’ve seen an was unconvinced that the outstanding
the assurances and that the Chinese improvement in the basis, which has Tier 2 would act as a sound base for
president, Xi Jinping, had also expressed meant we’ve had the rare occasion calculating fair value for a senior
support when he spoke with Zambia’s unsecured issue.
President Hakainde Hichilema in May. International Financing Review July 23 2022
“I don’t think the Tier 2 differentials
“We are hopeful because we have done work at the moment,” he said. “They only
everything that we needed to do on our work in non-EM investment-grade, and
side,” he said. even then they are all over the place.”
44
EMERGING MARKETS AMERICAS
Pricing steps NIP (bp) Book size Ratings Bookrunners Distribution
6.5% - - - Guotai Junan/JQ Sec -
T+150 area, T+125 - - Aa3/AA-/- GS -
- Aa3/AA-/-
T+200 area, T+173 - US$1bn Baa2/BBB-/BBB GS -
US$1.25bn Baa2/BBB-/BBB
T+290 area, T+265 30 - -/-/BBB- BNPP/Citi/CS/DBS/GS/HSBC/JPM/ -
(the #) MS/BoC/BoCom/CCB Asia/Miz/ -
- A3/BBB+/- Santan -
T+370 area, T+350 35 US$1.65bn, 111acs Aa2/AA/-
(the #) - A1/-/A+ BNPP/Citi/CS/DBS/GS/HSBC/JPM/ -
MS/BoC/BoCom/CCB Asia/Miz/
4.9% - - NR/NR/BBB+ Santan
4.22% @94.493 - US$1.55bn Guotai Junan/Industrial Bank Hong
Kong/CEB Intl/Galaxy Sec/CISI/
CICC/CSI/CLSA/CMBI/WingLung/
CMBC Cap/CNCB Capital /Hua Xia/
Huatai/Luso/SPDB HK/BoC
CLSA
T+150 area, T+123 18 BofA/Citi/CA-CIB/JPM/StCh/UBS APAC 58%, EMEA 18%, US 24%. AM/
(the #) FM 39%, Bks 27%, CB/SWF/Agcy 18%,
BoC/DB/JPM/ABCI/DBS/ICBC/CCB/ Ins/PF| 16%.
T+100 area - StCh/Miz/BoCom/CLSA/Citi/MS/ -
UBS/SPDB HK/Industrial Bank Hong
4.7% area, 4.5% - Kong/CNCB Capital/Haitong Intl -
Guotai Junan/BoC/ABCI/BoCom/
BOSCI/CEB Intl/WingLung/CNCB
Capital/Essence/Hua Xia/Huatai/
ICBCI/Industrial Bank Hong Kong/
Luso/SPDB HK/SMBC Nikko/CISI/
CICC/CLSA/CMBC Cap/CMBI
T+235 area, T+215 - NR/A/A Citi/Barc/Jeff/JPM/UBS -
area (+/-5 WPIR),
T+210
T+195 area, T+175 10 US$2.1bn Baa1/A-/A- MS/Barc/BofA -
(the #)
4HEûlRSTûBANKERûAWAYûFROMûTHEû “But the Israeli banks are in amazing AMERICAS
deal thought that another method shape, are very liquid and have strong
would be to look at other Middle balance sheets. So, I do think from a ARGENTINA
East banks. credit perspective they are in a good
position. It’s more about liquidity PAMPA ENERGIA RAMPS UP PRICE OF
“You can take some of the best and the markets, and are people willing to TENDER OFFER
Middle East banks like Qatar National buy?”
Bank and say fair value for them would be Argentine energy company PAMPA
around 125bp–130bp,” he said. “You can Investors did prove willing to play, ENERGIA increased on July 18 the price
price it back from there, and then you as orders grew to over US$1bn by the it will pay to exchange US$500m of
need a big new issue premium, given this time the US came in and then drove 7.375% notes maturing in 2023, as
market.” higher to US$1.55bn. The spread was well as the coupon of the new notes
lXEDûATû BP offered in the exchange. It also extended
A third method, albeit they are far the early tender deadline to July 29
bigger and more familiar institutions for “They had domestic support but there from July 20.
investors, was to look at recent prints WASûAûVERYûINTERNATIONALûmAVOURûTOûTHEû
from US investment-grade banks, such as order book, and the bulk of the orders The company did this to entice
JP Morgan (A2/A–/AA–), which sold a six- came from the international buyer base,” participation by investors that are
YEARûNON
CALLûlVEûDOLLARûBONDûISSUEûONû said the lead. seeking more compensation in
Monday at 175bp. light of the uncertainty surrounding
“It reminds you of the value of 144A. Argentina, according to buyside
One expected element in favour of Middle East deals have shown the value of accounts. For example, the bid price
Leumi was the prospect of a strong bid the local bid for getting deals done, and on the country’s 2030 variable coupon
from the US, in the face of a sour mood there was a bit of that here, but the 144A bonds dropped to 19.125 on July 20
among the buyside. aspect was important. If you put the two from 29.16 on June 1, according to
together, then, for the right name you can 2ElNITIVûDATA û
“You ask any investor which get a result comparable with 12 or 18
they’d prefer to see between banks, months ago.”
corporates and sovereigns, and
they’ll say banks are at the bottom,” Citigroup was global coordinator and
SAIDûTHEûlRSTûBANKERûAWAYûFROMû was joined as a bookrunner by Barclays,
the deal. Jefferies, JP Morgan and UBS.
International Financing Review July 23 2022 45
“Everybody is expecting Its US$750m offering of 4.7% 10-year The troubled payroll lender said in a
HYPER
INmATIONûANDûAûGOVERNMENTû senior unsecured notes priced at 99.881 to June 23 release that the bondholders’
default in the local market,” a portfolio yield 4.715% or Treasuries plus 175bp. It petitioning for the involuntary Chapter
manager said. attracted order books of US$2.1bn and the 11 held less than US$10m notes and that
new issue concession was 10bp, according ITûWOULDûhlGHTûTHEûINVOLUNTARYûPETITIONûINû
The new Pampa Energia notes due 2026 to bankers. the US”.
will now carry a coupon of 9.5%, up from
9%. Moody’s had assigned the proposed 9% “The pricing and new issue concession Credito Real has appointed US advisory
new notes a Caa3 rating, considering this was in line with US high grade,” one of lRMû2IVERONû#ONSULTINGûASûITSûFOREIGNû
a distressed exchange due to Argentina’s the bankers said. representative in the Chapter 15
central bank regulations that force procedure, according to a July 14
companies to extend payment terms of Sources said they don’t see any other statement. Chapter 15 bankruptcy allows
maturities. corporate deals coming before September a foreign debtor to shield assets in the US.
because it makes no sense for EM issuers The non-bank lender has US$1.76bn of
Investors who opt to receive only newly to come to market in a context of outstanding dollar and euro-denominated
issued 9.5% notes due 2026 are being OUTmOWS û.EVERTHELESS ûTHEûDEALûHASû BONDS ûACCORDINGûTOû2ElNITIVûDATA
offered US$1,030, up from US$1,010, for provided some reassurance to Latin
every US$1,000 of outstanding principal. American bankers. REGIONAL
Investors who opt for a combination of
new bonds plus a cash consideration of up “It shows that the market is not PATAGONIA HOLDCO STARTS
to about 30% of the principal amount are closed for the right issuers. It gives MARKETING BUYOUT BONDS
now being offered US$1,020, up from us quietude about our pipeline for
US$1,000. the rest of the year,” the same PATAGONIA HOLDCO, a holding company
banker said. created by Stonepeak Partners, is
The company had already extended the marketing a US$500m offering of seven-
early tender deadline to July 20 from July Morgan Stanley was the global YEARûNON
CALLûTHREEûSENIORûSECUREDûlRSTû
ûEARLIERûTHISûMONTH û4HEûOFFERûWASûlRSTû coordinator on the transaction, and Bank lien notes to help fund the acquisition of
announced on June 16. of America and Barclays were joint Lumen Technologies’ Latin American
bookrunners. America Movil opened the telecom business for US$2.7bn.
MEXICO initial price talk at the 195bp area over
Treasuries, offering 50bp of concession to JP Morgan, Goldman Sachs, Citigroup, Bank
AMERICA MOVIL PRINTS its 2.875% senior notes due 2030, of America, Natixis, Deutsche Bank and
10-YEAR BOND according to a CreditSights analyst note. Scotiabank are joint bookrunners. Investors
calls started on July 20 and run through to
Mexican telecoms group AMERICA MOVIL last At guidance it tightened to 175bp July 26.
WEEKûEXECUTEDûTHEûlRSTûBONDûDEALûBYûAû over US Treasuries, the eventual
Latin American company in more than launch spread. Initial price talk on the B1/B+ rated 7.5%
two months. senior secured notes is at 86 with a 10.4%
America Movil raised US$1bn via yield to maturity.
But that does not signal a reopening of an offering 10-year senior unsecured
the region’s bond market, sources said. NOTESûONû-ARCHû ûTOûHELPûlNANCEûTHEû 4HEûDEBTûlNANCINGûFORû3TONEPEAK Sû
spin-off of its tower business, Sitios purchase will also include a US$200m
“America Movil is its own category. It’s Latinoamerica. lVE
YEARûREVOLVERûANDûANû53 MûSEVEN
the bluest of blue chips in Latin America,” year term loan B, according to an investor
an investor said. CREDITO REAL ENTERS US CHAPTER 15 presentation. Stonepeak, which
specialises in infrastructure assets, will
It is rated above the Mexican sovereign -EXICANûNON
BANKûlNANCIALûINSTITUTIONû put in US$1.565bn of equity. The
and has a strong following from US high CREDITO REAL has started a liquidation acquisition is expected to close on
grade investors, rather than from the process in Mexico and a Chapter 15 August 1.
typical EM-focused Latin American bankruptcy procedure in the US, after
investor. opting against a voluntary Chapter 11 S&P said on July 18 it expects that
lLING once the transaction is complete
ALL INTL EMERGING MARKETS BONDS Patagonia’s debt-to-Ebitda will be
BOOKRUNNERS: 1/1/2022 TO DATE Credito Real said on Tuesday that a local 4x–4.5x this year and drop slightly
court has agreed to its liquidation under below 4x in 2023.
Latin America No of Total Share -EXICANûLAWûANDûTHATûITûHADûlLEDûFORû
issues US$(m) (%) Chapter 15 before the US Bankruptcy Lumen Technologies’ Latin American
Managing Court for the District of Delaware. The telecoms business, known as Columbus,
bank or group lRMûALSOûSAIDûITûHASûPRESENTEDûAûMOTIONûTOû spans a dozen countries and includes
dismiss an involuntary Chapter 11 ABOUTû KMûOFûlBRE û ûSUB
SEAû
1 Citigroup 16 6,488.81 16.7 petition made by a group of bondholders cable landing stations that connect
2 JP Morgan 18 5,640.71 14.5 in a US Bankruptcy Court of the Southern the US with Latin America, and 18
3 Bank of America 14 3,452.06 8.9 District of New York. data centres, the investor presentation
4 Santander 7 3,017.54 7.7 shows. The company has achieved
5 Barclays 5 2,651.39 6.8 The Mexico City-based institution 10 years of consecutive organic
6 Scotiabank 10 2,425.73 6.2 announced on June 9 that it had growth, with revenues growing at a
7 BBVA 3 1,734.71 4.5 concluded its contractual arrangements compound annual rate of 6.3% from
8 HSBC 3 1,332.22 3.4 with legal adviser DLA Piper and 2019 to 2021 on a constant currency
9 BNP Paribas 5 1,121.85 2.9 lNANCIALûADVISERû&4)û#ONSULTING ûTHEû basis, according to the preliminary
10 Credit Agricole 3 976.04 2.5 TWOûlRMSûTHATûHADûBEENûACTINGûASû offering memorandum.
38 38,968.39 restructuring advisers and preparing
Total the company for a voluntary Chapter 11
SDC code: L3 process.
Excluding equity-related debt.
Source: Refinitiv
46 International Financing Review July 23 2022
LOANS
Australia 48 China 48 Hong Kong 49 Japan Taiwan 51 Austria 51 France 52 Germany 52
South Africa 53 UK 53 United States 54 Leveraged Loans 56
FRONT STORY ASIA-PACIFIC MARKETS
New rules may spur PRC lending
Smaller onshore banks can participate in cross-border transactions
First lenders to take advantage have been branches of larger Chinese banks and foreign banks
New rules governing the offshore lending "ANKSûLICENSEDûINû#HINA ûINCLUDINGû rules have also introduced restrictions
business of Chinese banks are opening up ONSHOREûBRANCHESûOFûFOREIGNûLENDERS ûWITHû that prevent onshore banks from
opportunities for smaller domestic international settlement capability which participating in transactions that involve
lenders and Chinese branches of foreign are duly registered with the PBoC and AûRElNANCINGûOFûOFFSHOREûDEBTûSECUREDûBYû
banks to participate in offshore 3!&% ûAREûALLOWEDûTOûLENDûINûANYûCURRENCYû ONSHOREûSECURITYûORûGUARANTEES ûORûAû
SYNDICATEDûlNANCINGS ûRAISINGûHOPESûTHATû overseas within a set limit based on their repatriation of funds to the PRC through
THEûOVERSEASûLOANûMARKETSûWILLûBENElTû net Tier 1 capital. The banks are required inbound lending or equity investment.
from more liquidity. to submit monthly reports to the two
regulators regarding their offshore loan “We have already encountered cases
While major Chinese lenders have been balances. where some onshore lenders are unable
ACTIVEûOVERSEASûFORûDECADES ûSMALLERûBANKSû to participate in an offshore transaction
from the country stayed away from The PBoC circular will pave the way for because the use of proceeds of that loan is
offshore syndicated loans because of legal lending in renminbi for cross-border FORûRElNANCINGûOFFSHOREûDEBTûGUARANTEEDû
or compliance concerns and lack of TRANSACTIONSûANDûTHISûWILLûBEûBENElCIALûFORû BYûANûONSHOREûPARENTûCOMPANY vûSAIDûAû
CLARITY ûACCORDINGûTOû%UGENEû,AU ûHEADûOFû the internationalisation of the Chinese Hong Kong-based banker at a Chinese
capital markets at China Construction CURRENCY ûACCORDINGûTOû,AU bank.
Bank (Asia).
3OûFAR ûTHEûlRSTûLENDERSûTOûTAKEû “It will be interesting to see how
“We hope to see the Asia loan advantage of the new regime have been the dynamics will play out when
markets grow bigger with more branches of larger Chinese banks and of there are more interactions
liquidity coming from a wider foreign institutions. between onshore and offshore
investor base” banks”
)Nû*UNE û!GRICULTURALû"ANKûOFû#HINAû
h.OWûWITHû0"O#ûARTICLEû ûTHEREûAREû Shanghai branch participated in a “Some onshore lenders used to be able
clear guidelines for the smaller onshore (+ BNûSYNDICATEDûLOANûFORû&ARû%ASTû to join these deals as there were no
banks on how they can participate in (ORIZON ûANDû"ANCOûDOû"RASILû3HANGHAIû RESTRICTIONS vûSAIDûANOTHERû(ONGû+ONG
CROSS
BORDERûTRANSACTIONS vû,AU ûWHOûISû BRANCH û)NDUSTRIALû"ANKû3HANGHAIûBRANCHû based banker at another Chinese bank.
ALSOûTHEûVICE
CHAIRûOFûTHEû!SIAû0ACIlCû,OANû and Korea Development Bank Beijing h.OW ûBORROWERSûHAVEûTOûPROVIDEûEVIDENCEû
Market Association and its China branch also joined a US$875m loan for or make a declaration on where the funds
COMMITTEEûCHAIR ûSAIDûINûAûWEBINARûHOSTEDû &OSUNû)NTERNATIONAL û)Nû-ARCH û'RANDû are going before the onshore lenders can
by the association. "AOXINû!UTOûRAISEDûAû53 MûOFFSHOREû come on board. We are still evaluating
BORROWING ûAFTERûATTRACTINGûTHREEûONSHOREû HOWûBIGûTHEûIMPACTûWILLûBE vû
The Circular No 27 became effective on LENDERSûINûSYNDICATION ûINCLUDINGû#HINAû
-ARCHû ûAFTERûTHEû0EOPLE Sû"ANKûOFû#HINAû #ITICû"ANKû3UZHOUûBRANCH û#HINAû'UANGFAû Bankers also pointed out the
and the State Administration of Foreign Bank Shanghai branch and Industrial differences between onshore and offshore
%XCHANGEûJOINTLYûANNOUNCEDûTHEûREVISEDû Bank Shanghai branch. banks in terms of the credit approvals
framework in January. A three-month process and deal structuring.
transitional period for the rules ended on Some of these onshore banks have
May 31. previously participated in offshore h7HENûSTRUCTURINGûANû- !ûLOAN ûFORû
SYNDICATEDûLOANS ûANDûMARKETûPARTICIPANTSû EXAMPLE ûWEûEVALUATEûTHEûCREDITûQUALITYûOFû
“We as bookrunners have to distribute EXPECTûTOûSEEûMOREûOFûTHEMûJOININGûFUTUREû THEûTARGET ûWHEREASûONSHOREûBANKSûMAINLYû
ANDûSELLûDOWNûOURûDEALS ûWHILEûTHESEû deals. LOOKûATûTHEûCASHmOWûPROJECTIONS vûSAIDûAû
onshore banks are hungry for assets. third banker from a major Chinese bank.
)NSTEADûOFûINCREASEDûCOMPETITION ûWEû USE OF PROCEEDS
ACTUALLYûSEEûTHISûASûAûMUTUALLYûBENElCIALû It remains to be seen how big an impact “That is why they are sometimes able to
relationship. We hope to see the Asia loan the new rules will have as offshore China stretch loan tenors to seven years and
markets grow bigger with more liquidity lending has taken a hit in recent years. BEYOND ûANDûITûISûAûCHALLENGEûFORûOFFSHOREû
COMINGûFROMûAûWIDERûINVESTORûBASE vû,AUû 9EARûTOûDATE ûOFFSHOREû#HINAûLENDINGû banks to join these deals. It will be
said. DECLINEDûTOû53 BN ûCOMPAREDûWITHûAû interesting to see how the dynamics will
stellar US$96.6bn tally from the whole of play out when there are more interactions
ûAFTERûAûSLOWûYEARûOFû ûATû BETWEENûONSHOREûANDûOFFSHOREûBANKS v
53 BNûWHENû#OVIDûlRSTûHIT û4HEûTALLYû Apple Li
FORû ûWASû53 BN
-EANWHILE ûWHILEûOPENINGûTHEûPROSPECTû
FORûMOREûLIQUIDITY ûTHEû#IRCULARû.Oû û
International Financing Review July 23 2022 47
ASIA-PACIFIC /Nû!PRILû û5NITIûAGREEDûTOûAûTAKEOVERû YEARûTENORS ûRESPECTIVELY ûBASEDûONû3CENTRE Sû
offer of nearly A$3.62bn from MBC BIDCO ûANû CREDITûRATINGSûFROMû-OODY SûANDû3 0
AUSTRALIA entity wholly owned by a consortium
comprising Morrison & Co Infrastructure !.: û-5&'ûANDû.!"ûWEREûTHEû-,!"SûOFû
UNITI M&A LOAN LAUNCHED 0ARTNERSHIP û#OMMONWEALTHû THEû ûBORROWING ûWHICHûCOMPRISESûAû
3UPERANNUATIONû#ORPûANDû"ROOKlELDû ! Mû
YEARûREVOLVERûTRANCHEû! ûAû
A loan of A$1.925bn (US$1.31bn) backing Australia. ! Mû
YEARûTERMûLOANûTRANCHEû"ûANDû
the proposed acquisition of Australian a A$217.5m seven-year term loan tranche C.
telecoms company UNITI GROUP by New WOODSIDE DRAWS STRONG RESPONSE
:EALAND Sû-ORRISONû û#OûANDûAûUNITûOFû 4HEûOPENINGûMARGINSûFORûTHEû ûLOANû
#ANADA Sû"ROOKlELDû!SSETû-ANAGEMENTûHASû WOODSIDE ENERGY GROUP has attracted a strong WEREû BPûANDû BPûOVERû""39ûFORûTHEû
been launched into general syndication. response to a US$1.2bn loan.
ûANDûSEVEN
YEARûTENORS ûRESPECTIVELY
Barclays ûCommonwealth Bank of Australia û ANZ ûMizuho ûSMBC and Westpac are the 3CENTREû'ROUP ûRATEDû! ! ! ûISûTHEû
HSBC ûMizuho ûMUFG ûNatixis and Westpac are mandated lead arrangers and bookrunners guarantor.
THEûMANDATEDûLEADûARRANGERS ûBOOKRUNNERSû OFûTHEûBORROWING ûWHICHûISûSPLITûEQUALLYûINTOû
and underwriters. THREEûANDûlVE
YEARûPORTIONSû TRANCHESû!ûANDû !SûATû$ECEMBERû û3CENTREûHADû! BNû
C). OFûLIQUIDITYûANDû! BNûINûLOANS ûOFûWHICHû
4HEûBORROWINGûCOMPRISESûAû! Mû ! MûWEREûDRAWN ûACCORDINGûTOûITSûFULLû
THREE
YEARûBULLETûTERMûLOANû TRANCHEû! ûAû Bank of Communications ûChina Everbright YEARûRESULTS û)TSûDEBT
TO
%BITDAûRATIOûWASû û
! BNûlVE
YEARûBULLETûTERMûFACILITYû Bank and Standard Chartered have joined as TIMES ûWHILEûTHEûINTERESTûCOVERAGEûRATIOûWASû
TRANCHEû" ûAû! MûSEVEN
YEARûBULLETû NEWûLENDERS ûWHILEû!".û!-2/ û#HIBAû"ANK û 4 times.
TERMûPIECEû TRANCHEû# ûAû! MûTHREE
YEARû #REDITû)NDUSTRIELûETû#OMMERCIAL û%XPORTû
revolving credit facility for capital $EVELOPMENTû#ANADAûANDû-5&'ûHAVEûEXITEDû )Nû-AY û3CENTREûRAISEDûAû! MûlVE
YEARû
EXPENDITUREû TRANCHEû$ ûAû! MûTHREE
the facility. TERMûLOANûTOûRElNANCEû7ESTlELDû#ARINGDALEû
YEARûREVOLVERûFORûWORKINGûCAPITALû TRANCHEû% û in Queensland state.
and a A$25m three-year debt service reserve Participants are China Construction Bank û
facility (tranche F). ING ûDBS Bank ûDNB ûICBC ûStandard Chartered û MACMAHON EYES LARGER REFI
Bank of China ûBank of Communications ûBNP
4HEûLOANûPAYSûINTERESTûMARGINSûOFû BP û Paribas ûCredit Agricole CIB ûMega International Mining services company MACMAHON HOLDINGS
BPûANDû BPûOVERû""39ûFORûTHEûTHREE û Commercial Bank ûBank of Nova Scotia û ISûSEEKINGûAû! Mû 53 M ûLOANûTOû
lVEûANDûSEVEN
YEARûTENORS ûRESPECTIVELY Agricultural Bank of China ûChina Everbright INCREASEûANDûRElNANCEûANûEXISTINGûFACILITY
Bank ûSumitomo Mitsui Trust Bank ûHua Nan
4HEûREVOLVERSûOFFERûFEESûOFû ûOFûTHEû Commercial Bank and Shinsei Bank. HSBC is the sole mandated lead arranger
margin. and bookrunner.
The loan offers opening interest margins
,ENDERSûAREûINVITEDûATûlVEûLEVELS û-,!Sû of 95bp and 115bp over SOFR for the three )Nû$ECEMBERû û-AC-AHONûRAISEDûAû
committing A$125m and above are ANDûlVE
YEARûTENORS ûRESPECTIVELY ûBASEDûONû ! MûLOANûMATURINGû*ULYû ûFORû
offered participation fees of 15bp per THEûCOMPANY Sû"AA """ """ ûRATINGS EQUIPMENTûlNANCING ûWORKINGûCAPITALûANDû
ANNUM ûWHILEûLEADûARRANGERSûANDû general corporate purposes.
ARRANGERSûCOMINGûINûFORû! MûANDû /Nû-AYû û7OODSIDE SûSHAREHOLDERSû
ABOVEûANDû! MûANDûABOVE ûRESPECTIVELY û VOTEDûFORûAûMERGERûWITHû"(0û'ROUP Sû The loan offered an interest margin in the
earn a 12.5bp fee per annum. petroleum arm to create an independent oil MID
TO
HIGHû SûOVERû""39
ANDûGASûPRODUCERûWORTHû53 BN
-ANAGERSûANDûPARTICIPANTSûWITHû! Mû (3"#ûWASûALSOûTHEû-,!"ûFORûTHATûDEAL û
ANDûABOVE ûANDûBELOWû! MûBOTHûRECEIVEûAû "(0ûISûBEINGûPAIDûINû7OODSIDEûSHARES û WHICHûREPLACEDûANûEXISTINGû! MûLOAN
BPûFEEûPERûANNUM GIVINGû"(0ûINVESTORSûAû ûSTAKEûINûTHEû
MERGEDûGROUP ûWHICHûWILLûHAVEûASSETSûINû !SûATû$ECEMBERû û-AC-AHONûHADûNETû
)Nû-AY ûAûTARGETEDûGROUPûOFûLENDERSûWEREû !USTRALIA ûTHEû53 û-EXICO û3ENEGALûANDû DEBTûOFû! M ûWITHûNETûDEBT %BITDAûOFû
INVITEDûASû-,!SûANDûLEADûARRANGERS û Trinidad. ûTIMES ûACCORDINGûTOûITSûHALF
YEARûRESULTS
ASIA-PACIFIC LOANS BOOKRUNNERS – FULLY )Nû/CTOBERû û7OODSIDEûCOMPLETEDûANû )Nû!UGUSTû ûTHEûCOMPANYûSIGNEDûAû
AMENDMENTûANDûEXTENSIONûANDûINCREASEDûANû ! MûSYNDICATEDûASSETûlNANCEûFACILITY
SYNDICATED VOLUME (INCLUDING JAPAN) EXISTINGûREVOLVERûFROMû ûTOû53 BN
BOOKRUNNERS: 1/1/2022 TO DATE CHINA
4HEû ûBORROWINGûCOMPRISESûAû
Managing No of Total Share 53 MûTHREE
YEARûTRANCHEûANDûAû53 Mû OPPO UPS LOAN AFTER SOFR SWITCH
bank or group issues US$(m) (%) lVE
YEARûPORTIONûPAYINGûMARGINSûOFû BPû
ANDû BPûOVERû,IBOR ûRESPECTIVELY 'UANGDONG
BASEDûSMARTPHONEûMAKERû/PPOû
1 Bank of China 206 51,937.71 16.6 has increased its debut offshore syndicated
2 Mizuho 243 43,064.10 13.8 SCENTRE GROUP SEEKS A&E LOANûTOû53 BN ûAFTERûATTRACTINGû ûLENDERSû
3 MUFG 434 36,704.72 11.8 in a months-long syndication.
4 Sumitomo Mitsui 309 24,802.74 7.9 SCENTRE GROUP ûTHEûOWNERûOFû7ESTlELD
5 Taiwan Finl Holds 17,253.40 5.5 branded malls in Australia and New 4HEûlNANCINGûWASûOVERSUBSCRIBEDûBUTû
6 HSBC 22 8,975.50 2.9 :EALAND ûISûSEEKINGûTOûAMENDûANDûEXTENDûAû took longer to close because of the switch in
7 ANZ 42 ! Mû 53 M ûLOANûFROMû THEûPRICINGûBENCHMARKûFROMû,IBORûTOû3/&2
8 China Dev Bank 32 8,747.65 2.8
9 China Construction 7,682.81 2.5 ANZ ûMizuho ûMUFG and National Australia The bullet facility was launched last
10 Standard Chartered 7 7,416.25 2.4 Bank are the mandated lead arrangers and .OVEMBERûATûAû53 BNûSIZE ûOFFERINGûTOP
LEVELû
31 6,233.63 2.0 BOOKRUNNERSûOFûTHEûBORROWING ûWHICHûISûSPLITû ALL
INûPRICINGûOFû BPûANDû BPûBASEDûONû
Total 34 312,216.01 INTOûTERMûLOANSûANDûREVOLVINGûCREDITûFACILITIES û INTERESTûMARGINSûOFû BPûANDû BPûOVERû,IBORû
1,564 BOTHûWITHûTENORSûOFû
ûANDûSEVENûYEARSûEACH FORûTHEûTHREEûANDûlVE
YEARûTRANCHESûRESPECTIVELY û
Proportional credit SDC code: S3a The loan offers opening margins of 135bp 4HEûMARGINSûREMAINûTHEûSAME ûBUTûTHEû
Source: Refinitiv ANDû BPûOVERû""39ûFORûTHEû
ûANDûSEVEN
benchmark is now SOFR. Credit adjustment
SPREADSûOFû BP û BPûANDû BPûFORûONE û
THREEûANDûSIX
MONTHû3/&2 ûRESPECTIVELY û
have been added to the terms.
48 International Financing Review July 23 2022
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IFR Magazine 23.07.2022
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