Asia loans slide to seven-year low
Loans League Tables Slowest first half since 2012 as trade war dents Q2 volumes
BY PRAKASH CHAKRAVARTI
Syndicated lending in Asia
Pacific, excluding Japan, fell
22% to a seven-year low of
US$198.5bn in the first six
months of 2019 as the global
economy reeled from the
effects of the ongoing trade war
between the US and China.
Asian loans fell to US$92.0bn
in the second quarter, down
29% on the previous year and
14% on the first three months
of the year, according to LPC
data.
The number of deals
continued to fall, with the
second quarter clocking up 234
loans, compared with 355 in
the previous quarter. The first-
half tally of 589 deals was 16%
lower than 700 loans closed in
the first six months of 2018.
“The global economy
continued to suffer from
the overhang of the trade
war and uncertainty gripped
the financial markets,”
said Mildred Chua, head of
syndicated finance at DBS
Bank in Singapore. “Lending
activity in Asia took a hit this
year particularly due to the
slowdown in China and the
lack of blockbuster acquisition
financings.”
The effects of the trade
dispute between the US and
China were most evident
in China, where syndicated
lending in the first half of 2019
plunged 26% to US$35.4bn,
compared with US$48.4bn
a year earlier. Neighbouring
Hong Kong also suffered a 20%
decline to US$55.8bn this year
against US$69.7bn raised in the
first six months of 2018.
However, the two
geographies produced
significant activity from the
real estate sector, particularly
from financial sponsors
borrowing to buy assets.
“Real estate financing is
one of the areas where deal
flow has been encouraging
during the first half of this
year, especially from financial
sponsors and asset managers
who have been very active
acquiring assets,” said Amit
Lakhwani, head of loan
syndicate and distribution
for Asia Pacific at Standard
Chartered.
“The sector is less reliant
on exports or impacted by
tariffs and therefore has been
somewhat insulated from the
negative sentiment arising
from concerns on the trade
war.”
In May, a consortium
comprising private equitygiant Blackstone Group,
Hong Kong-based real estate
fund Gaw Capital Partners
and Goldman Sachs closed a
HK$9.2bn (US$1.17bn) five-year
loan backing the leveraged
buyout of a dozen shopping
malls from Hong Kong-listed
Link Real Estate Investment
Trust. It followed a Gaw Capital-
led consortium’s HK$13.8bn
LBO loan in March to back a
winning bid for commercial
properties of Link REIT in Hong
Kong.
Gaw Capital and Chinese PE
firm Hengli Group also raised
HK$9.9bn through senior and
mezzanine loans for their
acquisition of office towers
Cityplaza Three and Four in
Hong Kong’s Taikoo district.DOWN DOWN UNDER
Australia and Singapore
were among the other major
markets to post a significant
drop in loan volumes.
Australian volumes dipped 31%
to US$36.6bn in the first half,
while Singapore registered just
US$14.3bn, plummeting 51%
from the previous year.
Australia generated
several popular leveraged
financings, including a
A$2.15bn (US$1.52bn) senior
loan supporting the buyout ofAustralian hospital operator
Healthscope and a A$660m six-
year unitranche loan backing
US private equity firm TPG
Capital’s leveraged buyout of
Australian pet-store owner
Greencross.
“It is positive to see strong
investor demand for different
loan structures and across a
variety of sectors,” said Andrew
Ashman, head of loan syndicate
for Asia Pacific at Barclays.
“This year, we have seen a
broadening of the institutional
investor base with new lenders
from Australia, Singapore and
Hong Kong joining Aussie
dollar TLB [term loan B] loans
for the first time to gain
exposure to Australian credit.”
Elsewhere, Vietnam stood
out with a nearly four-
fold increase in lending to
US$5.4bn in the first six
months of 2019, compared
with US$1.1bn in the same
period a year earlier.
The pipeline in South-
East Asia shows promise,
particularly with a jumbo
S$8bn (US$5.9bn) new money
loan and amendment-and-
extension of existing debt for
Singaporean integrated resort
Marina Bay Sands, which is
expected to close in the third
quarter. For daily news stories
visit http://www.ifrasia.comTop bookrunners of Asia Pacific
syndicated loans G3 currencies
(ex-Japan, inc-Australia)
1/1/19 – 30/6/
Amount
Name Deals US$(m) %
1 Bank of China 20 5,655.6 8.
2 HSBC 28 5,499.1 8.
3 Standard Chartered 25 4,463.7 6.
4 SMFG 19 3,159.6 4.
5 Deutsche 13 2,711.6 4.
6 Mizuho 17 2,642.4 4.
7 ANZ 14 2,273.5 3.
8 MUFG 18 2,100.1 3.
9 CCB 5 1,811.8 2.
10 Credit Suisse 5 1,719.5 2.
Total 132 66,154.
*Market volume
Proportional credit
Source: Refinitiv data SDC Code: S3k
Top bookrunners of Asia Pacific
syndicated loans All currencies
(ex-Japan, inc-Australia)
1/1/19 – 30/6/
Amount
Name Deals US$(m) %
1 Bank of China 126 17,544.4 11.
2 HSBC 47 8,839.2 5.
3 BoCom 38 7,637.5 4.
4 Standard Chartered 40 7,049.6 4.
5 ANZ 35 6,852.8 4.
6 ABC 18 6,777.9 4.
7 MUFG 31 5,382.0 3.
8 SMFG 27 5,102.8 3.
9 State Bank of India 3 4,972.0 3.
10 UOB 16 4,543.8 2.
Total 505 159,854.
*Market volume
Proportional credit
Source: Refinitiv data SDC Code: STop bookrunners of Asia Pacific
syndicated loans Int’l currencies, Rmb
and NT$ (ex-Japan, inc-Australia)
1/1/19 – 30/6/
Amount
Name Deals US$(m) %
1 Bank of China 124 17,174.2 11.
2 HSBC 42 7,870.2 5.
3 BoCom 38 7,484.1 5.
4 Standard Chartered 37 6,898.4 4.
5 ANZ 35 6,841.1 4.
6 ABC 18 6,748.9 4.
7 MUFG Bank 31 5,358.3 3.
8 SMBC 27 5,079.9 3.
9 UOB 16 4,540.6 3.
10 Mizuho Bank 25 4,256.6 2.
Total 455 149,052.
*Market volume
Proportional credit
Source: Refinitiv data LPCTop bookrunners of Asia Pacific
syndicated loans All currencies
(ex-Japan and Australia)
1/1/19 – 30/6/
Amount
Name Deals US$(m) %
1 Bank of China 121 16,276.9 12.
2 BoCom 38 7,637.5 5.
3 ABC 18 6,777.9 5.
4 Standard Chartered 38 6,582.6 5.
5 HSBC 37 5,993.4 4.
6 State Bank of India 3 4,972.0 3.
7 DBS 29 4,124.4 3.
8 UOB 12 4,084.8 3.
9 SMFG 21 3,897.5 3.
10 Deutsche 13 3,145.3 2.
Total 436 129,581.
*Market volume
Proportional credit
Source: Refinitiv data SDC Code: S5c