League tables-r1:AMM grid in qxp 12/24/09 9:31 AM Page 24
MARKETREVIEW&OUTLOOK
ASIA(EX-JAPAN)TOPECMTRANSACTIONS
2009YTD
Pricing Issuer Deal Deal Dealvalue Bookrunner
date nationality type US$(m) parent
24-Jul-09 ChinaStateConstruction China IPO 7,342 CICC
EngineeringCorp.
17-Sep-09 MetallurgicalCorpofChina China IPO 5,130 CICC;CITICSecurities;Citi;MorganStanley
18-Nov-09 ChinaMinshengBankingCorp. China FO 3,892 BankofChina;CICC;Macquarie;UBS;HaitongSecurities
10-Nov-09 Maxis Malaysia IPO 3,294 CIMB;CreditSuisse;GoldmanSachs;J.P.Morgan;Nomura;UBS;
AmInvestmentBank;MaybankInvestmentBank;RHBCapital
07-Jan-09 ChinaConstructionBank China FO 2,844 BankofAmericaMerrillLynch;UBS
SOURCE: DEALOGIC
The Philippines was to return twice more to the market as well, firstly The lessons of funding diversification that bankers had for years been
with a US$750 million, 11-year issue in July, and then with a more sur- vainly attempting to press upon regional issuers have finally gained trac-
prising US$1 billion, 25-year deal in October, to help plug a wider-than- tion. It is to be hoped that they will continue to be remembered as lend-
anticipated budget deficit. Both deals were executed to good demand. ing lines become looser once more.
DOMESTICDELUGE SAVINGUPFORISSUES
With confidence back in the market in June, high-yield borrowers also It will be hard to top such a robust year for G3 issuance in 2010. Estimates
began to try their luck in the international market – especially from on likely G3 deal flow vary between US$40 billion and US$60 billion.
Indonesia. Nevertheless, bankers remain confident that it will be a healthy time
The pick of the bunch was Adaro, a well-respected Indonesian mining for more bond activity.
firm that raised US$800 million through a 10-year bond. Sovereigns are likely to be key players in the market. The Republic of
Other Indonesian issues were more mixed in their success. A US$315 the Philippines will be a likely contender to hit the international market
million, 11.75% five-year bond for BUMA, an Indonesian mining services once more for a major deal in January, an event that has become so rou-
company, was priced very generously to help counteract uncertainties tine it almost acts as an opening of the region’s international bond activi-
over a change in company management and deteriorating market condi- ty each year. Indonesia also has sizeable funding needs and can be
tions. expected to raise more debt.
Bumi Resources’ subsequent return to the market in November with a Plus there could be more surprising candidates. Vietnam is looking at
US$300 million deal also struggled, with the resources firm having to conducting another deal, and there are even sovereigns such as Laos
bring the deal in smaller than hoped and price at the wide end of guid- looking to get their credentials in order to conduct a potential deal fur-
ance. ther down the line.
A few Chinese companies also hit the high-yield market in October Outside of government borrowers, it looks as if financial institutions
and November, flooding the market with high-yield paper and investors could be highly active players in the region’s bond markets in the coming
grew increasingly disinterested. 12 months.
Meanwhile, the region’s domestic currency bond markets also “There is a large amount of refinancing of both senior and subordinat-
enjoyed some enviable levels of activity during the year. ed debt that needs to be done in Asia over the coming year,” notes
China was extremely vibrant, with many local banks raising enor- Andrew Jones, co-head of global risk and financial solutions at Barclays
mous subordinated bond issues, of which Industrial & Commercial Bank Capital.
of China’s Rmb30 billion (US$4.4 billion) deal was the largest. The renminbi bond market is also expected to accelerate, and many
India also witnessed its largest corporate bond via Infrastructure international banks will clamour to become larger players in that field.
Finance’s Rs73.7 billion five-year deal. There was a similarly notable Expect to see the local operations of UBS, Deutsche Bank, Standard
benchmark in the Philippines, when San Miguel Brewery conducted a Chartered and others tussling to get a larger slice of this activity in the
P38.8 billion (US$801 million) transaction early in 2009. It was also by coming year, while other banks desperately aim to get their licences in
far the country’s largest domestic corporate deal. place to conduct and trade such bonds, too.
By December 14, Asia had notched up US$65.4 billion in deal volumes The past year has underlined to the region’s companies and govern-
and a colossal US$369.4 billion in domestic currency issuance, by far the ments in no uncertain terms that having as many options as possible
high amounts on record. Topping the combined deal table was HSBC. when it comes to financing is a wise idea.
The level of activity is a testament to both the region’s comparative As Asia’s markets continue to grow, bond issues stand to become an
financial health but it also reflects the recognition among regional com- increasingly frequent tool of funding for regional companies, both large
panies that depending too heavily on bank lending is not healthy. and small.
ASIA(EX-JAPAN)TOPDCMTRANSACTIONS
2009YTD
Pricing Issuer Deal Deal Dealvalue Bookrunner
date nationality type US$(m) parent
26-Feb-09 RepublicofIndonesia Indonesia Sovereign,LocalAuthority 3,000 UBS;BarclaysCapital
08-Apr-09 RepublicofKorea SouthKorea Sovereign,LocalAuthority 3,000 GoldmanSachs;DeutscheBank;SamsungSecurities;
CreditSuisse;Citi;BankofAmericaMerrillLynch
14-May-09 AsianDevelopmentBank Philippines Supranational 3,000 J.P.Morgan;DeutscheBank;MorganStanley;HSBC
05-Aug-09 PetronasCapital Malaysia CorporateBond-InvestmentGrade 3,000 MorganStanley;CIMB;Citi
10-Nov-09 HutchisonWhampoa HongKong CorporateBond-InvestmentGrade 2,599 DeutscheBank;HSBC;Calyon
SOURCE: DEALOGIC
24 DEC2009/JAN2010 ASIAMONEY
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