International Financing Review Asia February 10 2018 31COUNTRY REPORT SOUTH KOREAfinal price represented an 8.3% discount
to the pre-deal close of S$1.12. Close to
40 accounts took part in the sale and
allocation was mostly skewed towards
long-only institutional investors, real-estate
specialists and existing unitholders. The top
10 investors were allocated more than 80%
of the shares.
There is a 90-day lock-up period on the
issuer.
Proceeds will be used to refinance the
acquisition of warehouses at the Arshiya
Free Trade Warehousing Zone located at
Panvel near Mumbai.
Citigroup and DBS were the
bookrunners.SOUTH KOREA
DEBT CAPITAL MARKETS
› DAEGU BANK DOES 5.5-YEAR PRINTDAEGU BANK, rated A2/A– (Moody’s/S&P), drew
final orders of US$2.3bn from 138 accounts
for US$300m of US dollar senior unsecured
bonds.
It priced the 3.75% 5.5-year notes
at 99.479 to yield 3.856%, or five-year
Treasuries plus 135bp, the tight end of finalguidance of Treasuries plus 135bp–140bp
and well inside the initial 155bp area.
Asia took 84% of the notes and Europe got
16%. In terms of investor types, 80% were
fund managers and asset managers, 9% were
banks, 8% were sovereign wealth funds and
insurers, 3% were private banks and others.
The Reg S notes have expected ratings of
A2/A– (Moody’s/S&P).
Citigroup, Credit Agricole and HSBC were
joint bookrunners.
Last November, Moody’s placed the
issuer’s long-term and short-term ratings
on review for downgrades after parent
company bought a controlling stake in Hi
Investment and Securities.GLP sponsors seek US$3.38bn funding
Loans Private-equity pair raising financing for equity contributions to acquiring consortiumPrivate-equity firms Hopu Investment
Management and Vanke Real Estate (Hong
Kong) are raising a US$3.38bn loan to back
their equity contributions to a consortium
that acquired Global Logistic Properties.
China Construction Bank (Asia) and
Industrial and Commercial Bank of China
are the mandated lead arrangers and
bookrunners.
Special-purpose vehicles NESTA
INVESTMENT PARTNERS II and NESTA INVESTMENT
PARTNERS III are the borrowers on the loan.
NIP II’s facility comprises a US$1.817bn
term loan and a US$223m revolving
credit, while NIP III’s borrowing is split
into a US1.23bn term loan and a US$110m
revolver.
The blended interest margin is 275bp
over Libor, while the blended tenor is 4.68
years.
Lenders receive a top-level blended
all-in pricing of 290bp and the mandated
lead arranger title for US$200m and
above, based on a blended participation
fee of 70.2bp, an all-in of 285bp and the
lead arranger title for US$100m–$199m,
via a fee of 46.8bp, and an all-in of 280bp
and the arranger title for US$50m–$99m,
via a fee of 23.4bp. The deadline for
commitments is February 9.
In December, GLP closed a US$4.108bn
leveraged buyout loan to support the
acquisition. Citigroup, DBS Bank, Goldman
Sachs, MUFG and Mizuho Bank were
original mandated lead arrangers and
bookrunners, while Bank of China, Bank of
Communications, China Merchants Bank and
Industrial & Commercial Bank of China joined
for the same title.
That loan offered a top-level blendedall-in of 135.4bp, based on a blended
interest margin of 124.06bp over Libor and
blended tenor of 3.095 years. The opening
margins are 135bp, 120bp, 110bp and 135bp
for tranches A1, A2, B and the revolver,
respectively. SPV Nesta Investment Holdings
is the borrower.
The loan, among the largest LBO
financings from Asia, will add to the debt of
US$5.1bn at the operating subsidiaries of
GLP, which existing lenders could roll over.
Last July, GLP, together with its
subsidiaries and Cayman Islands-
incorporate NIH jointly said that the SPV
would acquire all the shares of Asia’s
biggest warehouse operator for a cash
consideration of S$3.38 per share, valuing
the company’s equity at about S$16bn
(US$11.9bn).
China Vanke, the parent of Vanke Real
Estate, is the largest shareholder in NIH
with a 21.4% stake and contributed around
US$2.45bn, according to its filing with the
Hong Kong stock exchange on January 22.
Other members of the buying consortium are
Hillhouse Capital Group and SMG Eastern,
an entity under the full control of GLP CEO
Ming Zhi Mei, as well as Bank of China Group
Investment.
GLP was delisted from Singapore
Exchange on January 22.
On February 2, Fitch downgraded GLP’s
credit ratings to BBB from BBB+, on its
expectations that the holding company’s
leverage would increase sharply to over
70% after it drew down additional loans in
January. Fitch calculates the leverage as the
ratio of holding company net debt less net
working capital to holding company liquid
investment.Fitch has said it believes leverage will
gradually decline, but that it may take more
than 24 months for GLP to deleverage below
50%. GLP’s leverage increased from below
25% at end-March 2017 after it took on debt
to provide financing to its new shareholders
to fund its buyout.
Fitch expects the holding company’s
interest coverage ratio, which is the ratio
of holding company’s recurring Ebitda to
interest paid, to be healthy at above 2x,
despite the increase in its loans. The agency
expects GLP’s recurring Ebitda interest
coverage to be 2.5x for the year ending
March 2018.
The company has put in place a
deleveraging plan, but its successful
execution within the next 24 months may not
be within GLP’s control. GLP’s deleveraging
plan includes asset recycling initiatives in
China and Japan to take advantage of the
low interest rates there.
In December, GLP announced that it had
obtained approval from the China Securities
Regulatory Commission to issue up to
Rmb12bn (US$1.88bn) of bonds in Shenzhen
for projects related to China’s Belt and Road
Initiative. Fitch has said the issuance will
take advantage of the low leverage of GLP’s
Chinese operating company.
GLP’s US$46bn of globally diversified
logistic assets were located in China (34%),
the US (33%), Japan (23%), Brazil (6%) and
Europe (4%) at December 2017. GLP is the
largest logistic asset owner in China, Japan
and Brazil.
GLP counts several of the world’s leading
retailers and manufacturers among its
clients.
EVELYNN LIN1028_07 Country02.indd 31 09/02/2018 22:00:44