COUNTRY REPORT AUSTRALIAA$17.7m Class C tranche (A2/A) priced at
195bp from low 200s area; a A$12m Class
D tranche (Baa2/BBB) priced at 280bp
from 300bp area; and a A$7.5m Class E
tranche (Ba1/BB+) priced at 490bp from
low 500s.
A A$15m Class F unrated tranche was
retained.
The weighted average life of the Class A1
tranche was 0.3 years; for the Class A2 and
A2-G tranches it was 1.5 years; and for Class
B-G, C, D and E was 1.7 years.
Credit enhancement was 22.5% for the
Class A1, A2 and A2-G tranches, 17.4% for
the Class B-G, 11.5% for the Class C, 7.5% for
the Class D, and 5.0% for the Class E.
NAB was sole arranger. It was also joint
bookrunner with CBA. The transaction will
settle on May 9.
› PEPPER GROUP EYES PRIME RMBS
Australian non-bank lender PEPPER GROUP has
hired CBA, NAB and Westpac to liaise with
investors with regard to a potential prime
RMBS transaction.
An Australian dollar deal may follow,
subject to market conditions.
SYNDICATED LOANS
› ACCOLADE WINES' £300M TLBCitigroup, Credit Suisse, ING Bank, Mizuho Bank
and Rabobank have underwritten a £300m
(US$408m) covenant-lite term loan B toback private equity giant Carlyle Group’s
A$1bn (US$771m) takeover of Australia’s
ACCOLADE WINES.
The financing comprises acquisition term
debt as well as a A$150m revolving credit
facility for working capital and capital
expenditure.
The deal is in early-bird stages, with the
Top bookrunners of Australian equity and
convertible offerings
1/1/18 – 30/4/18
Amount
Name Issues US$(m) %
1 UBS 9 2,890.5 27.1
2 Morgan Stanley 4 1,662.3 15.6
3 Macquarie 6 629.7 5.9
4 Deutsche 2 602.7 5.7
5 Morgans Financial 12 532.3 5.0
6 Citigroup 3 481.9 4.5
7 JP Morgan 2 388.5 3.6
8 Hartleys 15 386.7 3.6
9 Euroz Sec 8 289.0 2.7
10 Taylor Collison 11 279.4 2.6
Total 228 10,676.4
*Market volume
“Standard Exclusion not applicable”
Proportional credit
Source: Thomson Reuters SDC Code: AK1Top bookrunners of Australian equity
1/1/18 – 30/4/18
Amount
Name Issues US$(m) %
1 UBS 9 2,890.5 29.0
2 Morgan Stanley 4 1,662.3 16.7
3 Macquarie 6 629.7 6.3
4 Morgans Financial 12 532.3 5.4
5 Citigroup 3 481.9 4.8
6 JP Morgan 2 388.5 3.9
7 Hartleys 15 386.7 3.9
8 Euroz Sec 8 289.0 2.9
9 Taylor Collison 11 279.4 2.8
10 Deutsche 1 252.7 2.5
Total 223 9,952.3
*Market volume
“Standard Exclusion not applicable”
Proportional credit
Source: Thomson Reuters SDC Code: AK2Kestrel duo eye lower funding cost
Loans Sponsors mull rejig of US$1.7bn coal M&A loanThe US$1.7bn financing for Indonesia’s ADARO
ENERGY and Australian private equity firm EMR
CAPITAL’s acquisition of Rio Tinto’s Kestrel
coking coal mine could include a larger
portion of the project loan if syndication
goes well, market sources familiar with the
situation said.
As the sponsors consider options to
cut their overall financing costs, the more
expensive US$400m 12-month bridge to
high-yield bond could be reduced in size as
it received an indicative rating of around B+,
lower than the BB+ rating the two leads had
earlier envisaged, the sources said.
Pricing for a high-yield bond for a
single-asset financing could come around
800bp–850bp over Libor, more than double
the 375bp interest margin on the US$1.05bn
five-year amortising project loan, explained
the sources.
Syndication of the financing is expected
to be launched later this month and Adaro’s
Asian relationship banks have already shown
strong interest to participate, according to
the sources.
“The sponsors are well within their rights
to ask that additional commitments from the
syndication be applied to increase the overallsize of the project facility and lower the size
of the high-yield bond portion,” said one of
the sources.
The economics of the project will improve
if the financing is rejigged to include a
bigger project loan component that is less
expensive, said the source.
MUFG and Standard Chartered are
providing the US$400m bridge to high-yield
bond, while ANZ, CIMB Bank, DBS Bank,
MUFG, OCBC Bank, StanChart and Sumitomo
Mitsui Banking Corp are underwriting the
US$1.05bn term loan. Four of the seven
lenders on the term loan are also providing a
US$250m revolving credit facility.
The project loan and the high-yield
bond are senior secured instruments in
the capital structure and share the same
security package, explained another source.
However, the lenders will be repaid ahead of
bondholders as the project loan amortises
over five years, whereas the bond would have
a bullet repayment at the end of the five
years.
In addition to the US$1.7bn senior and
bridge financing, Adaro and EMR are also
raising a US$400m 5.5-year mezzanine
loan from Nomura and Varde Partners at theholding-company level. The junior tranche is
structured as a pay-in-kind note, yielding well
over 10%.FULLY FUNDED
The sponsors are acquiring an 80% stake in
Rio’s Kestrel coking coal mine for A$2.25bn
(US$1.74bn) with Japanese trading house
Mitsui & Co holding the remaining 20%. The
company has until the end of the month to
sell its minority stake to Adaro and EMR,
double its stake to 40% or retain its existing
holding.
In the event Mitsui exits its investment,
the debt Adaro and EMR are raising would
be sufficient to fund the entire acquisition,
according to sources.
The Kestrel mine – Rio Tinto’s last
remaining coal mine in Australia – in the
Bowen Basin region produces high-quality
coking coal for steel manufacturing. It has
significant reserves of 146 million tons and
is in the lowest-cost quartile of comparable
mines.
The acquisition is subject to regulatory
approvals and is expected to be completed in
the second half of this year.
SHARON KLYNE