COUNTRY REPORT HONG KONGin Hong Kong and Singapore last week.
The proposed AT1 securities have an
expected Ba2 rating from Moody’s.
Chong Hing Bank’s common equity Tier
1 ratio improved to 13.4% at the end of
2018 from 11.3% at the end of 2017.
SYNDICATED LOANS
› GOSHAWK LAUNCHES BULLET
Dublin-based aircraft leasing company
Goshawk Aviation has launched an
unsecured US$500m five-year bullet term
loan with a greenshoe option.
Agricultural Bank of China Hong Kong branch
is the sole mandated lead arranger and
bookrunner of the financing. China Everbright
Bank Hong Kong branch, Development Bank of
Japan, OCBC Bank, Philippine National Bank
and Societe Generale Hong Kong branch, which
joined as senior lead arrangers before
launch, and ABC will together pre-fund the
US$500m amount. The deal will be increased
beyond US$500m when banks join through
the greenshoe option in syndication.
The deal, guaranteed by Goshawk Aviation,
is split between tranche A for DIONYSUS AVIATION
and tranche B for MAGUEY DUTCH AVIATION. The
interest margin is 160bp over Libor.
Banks have been invited to join as senior
lead arrangers with commitments of
US$40m–$50m for a top-level all-in pricing
of 170bp based on an upfront fee of 50bp.
Lead arrangers with tickets of US$30m–
$39m earn an all-in pricing of 168bp
through a fee of 40bp while arrangers
committing US$20m–$29m receive an all-in
of 166bp based on a 30bp fee. Sub-arrangers
with tickets of US$10m–$19m are offered
an all-in of 164bp through a 20bp fee.
Funds are for general corporate purposes.
Commitments are due by August 16.
In July 2018, the two borrowers raised
a US$430m five-year term loan also
guaranteed by Goshawk Aviation and led by
ABC Hong Kong branch. That deal attracted
six other banks and offered a top-level
all-in pricing of 168.5bp based on the same
margin of 160bp over Libor.
Later that year in November, Goshawk
Aviation signed a US$1.14bn four-year
revolving credit facility with 15 banks. The
loan was mainly coordinated in Europe but
some banks in Asia also joined. CitibankEurope is the facility agent.
Established in November 2013, Goshawk
currently has a fleet of 223 aircraft. Hong
Kong’s Chow Tai Fook Enterprises and NWS
Holdings are equal shareholders of the
company.› NINE DRAGONS PAPER SIGNS HK$3.9BNHong Kong-listed NINE DRAGONS PAPER (HOLDINGS)
signed a HK$3.9bn (US$500m) three-year
term loan for its US unit on June 28,
according to a stock exchange filing.FWD brings rare sub notes
Bonds Insurer sells subordinated bullet bonds in PB-driven offeringInsurer FWD GROUP sold what is thought to
be one of the first US dollar subordinated
bonds with a bullet maturity from an Asian
corporate issuer.
The Hong Kong-headquartered pan-
Asian insurance group last Thursday priced
US$550m five-year subordinated unsecured
bonds at par to yield 5.75%, inside initial
guidance of 6% area.
The issuer was thought to have paid a
higher yield than it would have done for a
senior unsecured bond, but bankers said it
was hard to put a number on it.
Orders built steadily from US$600m on
Thursday morning to a peak of US$2.1bn when
final guidance was announced. Private banks
were said to have been the main drivers of
the deal.The bonds opened at a cash price of
100.75, before rising further to 101.
The notes are unrated, as is the issuing
entity, so FWD did not need to sell
subordinated bonds to defend a rating, but
a banker said the new issue would fit in well
with the company’s capital structure.FWD had only issued subordinated
perpetual securities prior to this deal, and has
only bank debt.
“We use a mixture of debt, hybrid securities
and equity to finance our growth and
expansion, similar to our international peers,”
said a spokesperson for FWD.
The bonds also had other rarely seen
structural features, balancing protection for
investors with flexibility for the issuer.
Hong Kong tycoon Richard Li currently
holds a 75.4% stake in FWD, alongside other
investors including Swiss Re and Singapore
sovereign wealth fund GIC. If Li ceases to
control FWD, the issuer can redeem the
bonds at 101% of face value or increase the
interest rate by 500bp.
The issuer can also redeem the bonds at
101% of face value if it holds an IPO.
UBS and JP Morgan were joint
bookrunners.
Proceeds from the bond issue will be used
for general corporate purposes.
DANIEL STANTONTop bookrunners of Hong Kong dollar bonds,
ex-certificates of deposit, commercial paper
1/1/19 – 30/6/19
Amount
Name Issues HK$(m) %
1 HSBC 30 16,880.0 35.3
2 BoCom 4 5,918.3 12.4
3 Standard Chartered 12 5,349.8 11.2
4 Bank of China 4 2,174.9 4.6
5 CBA 3 1,918.3 4.0
6 OCBC 2 1,305.0 2.7
7 BNP Paribas 6 1,300.0 2.7
8 Credit Agricole 6 1,260.0 2.6
9 Citigroup 2 1,257.1 2.6
10 Nomura 2 1,147.1 2.4
Total 68 47,792.0
*Market volume
Proportional credit
Source: Refinitiv data SDC Code: AS6
Top bookrunners of Hong Kong syndicated loans
1/1/19 – 30/6/19
Amount
Name Deals US$(m) %
1 HSBC 21 3,993.0 11.0
2 Bank of China 17 3,426.9 9.5
3 Standard Chartered 12 2,725.9 7.5
4 China Merchants Bank 9 1,912.8 5.3
5 Deutsche 6 1,889.1 5.2
6 UOB 3 1,857.0 5.1
7 DBS 8 1,574.2 4.3
8 Mizuho 7 1,324.7 3.7
9 BoCom 8 1,290.1 3.6
10 ICBC 7 1,128.8 3.1
Total 60 36,250.4
* Based on market of syndication and market total
Proportional credit
Source: Refinitiv data SDC Code: S9bHong Kong global equity and equity-related
1/1/19 – 30/6/19
Amount
Name Issues US$(m) %
1 HSBC 3 654.1 15.2
2 Credit Suisse 3 555.0 12.9
3 Morgan Stanley 3 448.6 10.4
4 Guotai Junan Sec 4 259.2 6.0
5 JP Morgan 1 254.8 5.9
6 Goldman Sachs 2 218.5 5.1
7 DBS 3 180.8 4.2
8 Citic 2 155.2 3.6
9* BNP Paribas 1 135.0 3.1
9* Citigroup 1 135.0 3.1
Total 63 4,315.5Source: Refinitiv data