24 International Financing Review Asia April 4 2020Sydney branch, for a A$600m domestic three-
year covered floating-rate note arranged by
HSBC, NAB, Westpac and CIBC.
CIBC Sydney previously issued a A$1bn
three-year covered FRN last July, which is
backed by Canadian mortgages and priced
at three-month BBSW plus 50bp.
CIBC has also issued covered Kangaroos
previously with Canadian banks particularly
active participants in the Australian covered
bond market in recent years.
Beyond the four Canadian lenders –
CIBC, Bank of Nova Scotia, Royal Bank
of Canada and Toronto-Dominion – the
only other covered Kangaroo issuers since
the financial crisis have been Swedish
mortgage lender Stadshypotek, Bank of
New Zealand, Norway’s DNB Boligkreditt
and Singapore’s DBS Bank.› TCORP GOES PUBLIC FOR A$3.2BNNEW SOUTH WALES TREASURY CORP raised A$3.2bn
from last Thursday’s public two-part note
offering via joint lead managers CBA,
Citigroup, UBS and Westpac, which represents
the largest semi government transaction
since 2011, according to the issuer.
TCorp, rated Aaa/AAA (Moody’s/S&P),
priced a A$1.2bn 3.5-year floating rate note
within 36bp–40bp guidance at three-monthBBSW plus 39bp.
The state funding arm also tapped its
1.0% February 8 2024 bond for A$2bn to
take the issue size up to A$4.468bn.
The reopening priced at 100.620 for a
yield of 0.835%, within 55bp–59bp guidance
at EFP plus 58bp, equivalent to 52bp over
the April 2024 ACGB.
Domestic investors were allocated
approximately 87% of each issue with bank
balance sheets buying 82% of the floating-
rate note and 58% of the fixed-rate bond.
Fiona Trigona, head of funding and
balance sheet, said: “TCorp decided to re-
enter the market after receiving positive
feedback from investors.
“Today’s results are particularly pleasing,
especially on the back of last week’s
[private] A$1.125bn five-year floating-rate
note issuance. We remain committed to
supporting the liquidity of our Benchmark
Bond Programme and to the needs of our
investor base.”SYNDICATED LOANS
› VIRUS TOPPLES FAR PROJECT DEBTSyndication of a US$300m senior secured
reserve-based lending facility backing anoffshore oil field project of FAR in Senegal
cannot be completed in the current
environment, the Australian oil company
said last Monday.
“The COVID-19 pandemic combined
with the precipitous fall in Brent oil
price by over 60% since January 2020 has
adversely impacted global financial markets
including the global availability of credit,”
FAR said in an ASX filing.
“As a result, the board is of the opinionLenders grant Speedcast temporary relief
Loans Forbearance agreement signed over repayments due March 31Lenders to SPEEDCAST INTERNATIONAL have
granted the company temporary relief on
a debt payment that came due earlier last
week and waived a leverage covenant with a
testing date of December 31.
The company and its lenders signed a
forbearance agreement effective March
31 and expiring April 17, according to an
Australian Securities Exchange filing last
Thursday.
The agreement relates to non-payment
of interest and principal payments due on
March 31, and any potential breach of the net
leverage covenant as at December 31 2019.
“During the course of finalising
Speedcast’s FY19 results, it became apparent
that it was likely that the company would not
satisfy the net leverage covenant under its
syndicated facility agreement as at December
31 2019 (with that covenant calculation due
to be provided to the lenders by the end of
April),” the filing said.
Speedcast also said the impact of the
coronavirus pandemic was being felt across
its business and current equity marketconditions “precluded a meaningful equity
raising to support a recapitalisation”.
Earlier in the week, Speedcast had
flagged the forbearance agreement, which is
intended to assist with its liquidity position,
to provide the company stability and to allow
trading while the terms of interim funding are
being finalised.
Speedcast is in discussions with its lenders
on a bridge financing that would allow
it to continue operations and engage in
recapitalisation and restructuring.
On March 19, Moody’s cut Speedcast’s
rating to Caa1 on expectation that the
coronavirus will significantly hurt the
company’s services and further exacerbate its
already weak earnings and liquidity.
That follows downgrades from the rating
agency and S&P in early February to B3 and
CCC respectively with negative outlooks,
when it warned of heightened risk of a
covenant breach or a payment default over
the next 12 months and uncertainty over the
company’s ability to improve earnings and
liquidity.Speedcast completed a US$175m add-on
financing in September 2018 to help fund its
acquisition of Globecomm, according to its
announcement on December 17 that year.
The only financial covenant in the
company’s debt facilities is a requirement
to maintain net leverage (net debt-to-
consolidated Ebitda) at or below 4.0x,
according to the announcement, which
added that the covenant only applied if more
than 35% of a US$100m revolving credit
facility was drawn.
Speedcast’s net leverage as at June 30
2018 pro forma for the transaction was 3.4x
Ebitda, the announcement said at the time.
The US$175m add-on and the US$100m
revolver complemented a US$425m seven-
year term loan B that Speedcast completed
in May 2018.
The US$425m TLB has no financial
covenants and offers an interest margin
of 275bp over Libor, which was amended
from 250bp in September that year when
Speedcast priced the US$175m add-on.
MARIKO ISHIKAWATop bookrunners of Australia syndicated loans
1/1/20 – 31/3/20
Amount
Name Deals US$(m) %
1 CBA 6 800.7 23.3
2 ANZ 3 599.7 17.4
3 NAB 3 500.0 14.5
4 BNP Paribas 2 298.9 8.7
5 MUFG 1 242.8 7.1
6 Mizuho 2 239.3 7.0
7 Westpac 2 193.4 5.6
8 Standard Chartered 2 153.1 4.5
9* ICBC 1 109.5 3.2
9* SMFG 1 109.5 3.2
9* Bank of China 1 109.5 3.2
Total 17 3,440.3
* Based on market of syndication and market total
Proportional credit
Source: Refinitiv data SDC Code: S7B&RXQWU\LQGG