COUNTRY REPORT
Australia 17 China 18 Hong Kong 22 India 25 Indonesia 27 Japan 27 Malaysia 28
New Zealand 28 Singapore 28 South Korea 29 Taiwan 29 Thailand 31 Vietnam 31AUSTRALIA
DEBT CAPITAL MARKETS
› CBA GETS BLOCKCHAIN BOOST
Moody’s sees the appointment of
COMMONWEALTH BANK OF AUSTRALIA as sole
arranger of the world’s first blockchain
bond to be credit-positive for the bank it
currently rates Aa3 with a stable outlook.
“It shows the bank is making headway
with significant fintech initiatives, which
can help improve its operating efficiency
and fend off new competition,” according
to the ratings agency.
The World Bank chose CBA to arrange
its inaugural blockchain bond, which is
expected to be launched and priced soon.
Expectations are for an initial A$100m
(US$72m) Kangaroo print with a likely
tenor of two years.
CBA will use the private Ethereum
blockchain platform to create, allocate,
transfer and manage the new debt
instrument, dubbed a Bondi bond in
reference to Australia’s most famous beach.
“The use of blockchain for bond issuance
can offer efficiency benefits for both issuers
and arrangers by simplifying the settlement
processes,” Moody’s said.
“The technology can be used for
both registry and payment systems,
consolidating payments by investors and
title transfers by issuers into single, instant
transactions”.› NTTC OPENS 2030 LINENORTHERN TERRITORY TREASURY CORP , rated
Aa2 (Moody’s), raised A$500m from last
Wednesday’s syndicated sale of 3.5% May
21 2030s.
The new bond, via joint leads ANZ , NAB
and UBS , priced at 100.620 for a yield of
3.435%, at the wide end of EFP (10-year
futures) plus 83bp-86bp guidance and 80bp
over the May 21 2030 ACGB.
No bonds were repurchased by the NTTC
through its simultaneous buyback offer for
holders of the A$479.4m 4.75% September
20 2018 bond.
The previous syndicated issuance by a
state government funding arm was on July
10 when Queensland Treasury Corp, ratedAa1/AA+ (Moody’s/S&P), targeted the same
part of the curve.
QTC then tapped its 3.50% August
21 2030 bond for A$1bn at 67bp and
61.25bp over EFP and the May 2030 ACGB,
respectively.› DBS AUSTRALIA PRINTS TIGHT FLOATERDBS BANK , Australia branch, rated Aa1/AA-/
AA-, continued the recent run of three-
year floating-rate note bank issues with
last Tuesday’s A$600m sale via joint lead
managers DBS , CBA , NAB and Westpac.
The August 23 2021s priced below 75bp
area guidance at three-month BBSW plus
72bp. Pricing was also 1bp inside the 73bp
margins paid by Commonwealth Bank of
Australia (Aa3/AA-/AA-) and HSBC, Sydney
branch, rated Aa3/AA- (Moody’s/S&P), for their
three-year floaters, issued the previous week.› NEWCASTLE TAPS 2022 FRNRegular issuer NEWCASTLE PERMANENT BUILDING
SOCIETY , rated A3/BBB (Moody’s/S&P), tapped
its January 24 2022 floating-rate note for
A$75m last Friday, increasing the size of
the issue to A$225m.CDH borrows up to US$850m for Sirtex buy
Loans Liver cancer treatment specialist buyout loan pays rich pricingCDH INVESTMENTS has launched an up to
US$850m loan to back the acquisition of
a majority stake in Australian liver cancer
treatment specialist SIRTEX MEDICAL.
Bank of China Macau branch is the
mandated lead arranger, bookrunner and
underwritter of the financing.
The deal comprises a US$300m five-year
term loan tranche A, a US$150m incremental
five-year term loan tranche B and a
US$400m 1.5-year bridge loan tranche C.
BOC Macau is expected to pre-fund
tranches A and C with a combined amount of
US$700m to help complete the acquisition.
Tranche B will be utilised at a later stage to
help refinance tranche C and its actual drawn
amount will be constrained as the borrower is
required to maintain a senior leverage of 5.5x
after the incremental facility is drawn. CDH
Investments is expected to bring in other
investors, whose equity commitments will
also help refinance tranche C.The interest margins on the five-year and
1.5-year portions are 420bp and 400bp over
Libor, respectively. The average life of the
five-year portion is 3.95 years.
Banks are being asked to join tranches
A and B on a pro-rata basis, and they can
choose to join tranche C or not.
MLAs committing US$75m or more will
receive an all-in pricing of 445bp or 413bp via
management fees of 100bp or 20bp for the
five-year and 1.5-year portions, respectively.
Lead arrangers with US$50m–$74m
tickets will obtain an all-in pricing of 438p
or 407bp via management fees of 73bp or
10bp, respectively. Arrangers committing
US$30m–$49m will get an all-in pricing of
430bp or 400bp via management fees of
40bp or 0bp, respectively.
Responses are due on September 10.
On July 16, Sirtex said that the US
Federal Trade Commission had granted
early termination of the waiting period forthe buyout, clearing a major hurdle for the
deal to go through. The transaction has
already been approved by Australia’s Foreign
Investment Review Board.
In mid-June, Chinese alternative asset fund
manager CDH and its partner, China Grand
Pharmaceutical and Healthcare Holdings,
emerged as the winners for Sirtex with a
A$1.9bn (US$1.4bn) offer, trumping a rival bid
from US-based Varian Medical Systems.
According to a Sirtex stock filing on June
14, CDH will own 51% of the company, while
CGP will own the remainder. The acquisition
is scheduled to be completed on September
20 and Sirtex will then be delisted from the
Australian stock exchange.
In early July, Hong Kong-listed CGP
announced a rights issue of up to HK$2.88bn
(US$367m) to pay for the acquisition. The
balance consideration will be funded by
existing cash.
EVELYNN LIN, YAN JIANG