IFR International - 28.07.2018

INCLUDINGû!
!
û(IGHû3PEEDû2AILû&INANCEû
.OVEMBERûSûATû'ILTSûPLUSûBPûANDû!!!û
$WRû#YMRUû7ELSHû7ATERû-ARCHûSûATûBP
0ROCEEDSûWILLûRElNANCEûLOANûFACILITIESû
linked to a 30-year contract for
IMPROVEMENTûWORKSûTOûTHEû-ûMOTORWAYû
The company was awarded the £6.2bn
contract in early 2009 and shortly after
INKEDûAûaBNûFUNDINGûPACKAGE ûACCORDINGû
TOû0&) û)&2SûSISTERûPUBLICATION
0&)ûINû!PRILûSAIDûITûHADûCHOSENûTOûGOûDOWNûTHEû
PUBLICûBONDûROUTEûINSTEADûOFûAûPRIVATEû
PLACEMENT ûANDûCITEDûMARKETûRUMOURSûTHATûLEADSû
HADûPUTûANûINDICATIVEûPRICEûOFûBPûOVERû'ILTSûONû
the deal during the funding competition.
!CCORDINGûTOûANûINVESTOR ûHOWEVER ûTHEû
)04SûDIDûNOTûREmECTûTHEûRISKSûASSOCIATEDûWITHû
the trade.
h#OMINGûATûTHEûWRONGûTIMEûOFûYEAR ûTOOû
BIG ûAMORTISING û0&)û
ûITûTICKSûAûNUMBERûOFû
BOXESûTHATûSHOULDûPROVOKEûDISCOUNTSûBUTûATû
BPûDOESNTûPRICEûINûANYûOFûTHAT vûHEûSAIDû
during the early stages of marketing.
Bookrunners were Barclays ûHSBCû"$ û
and Lloyds.

WALES & WEST BACK WITH STERLING
EXTENSION

WALES & WEST UTILITIESûEXTENDEDûITSûCURVEûLASTû
Friday with a four-times-subscribed 20-year
secured benchmark.
)NVESTORSûPOUREDûMOREûTHANûaBNûOFû
ORDERSûINTOûTHEûaMûDEAL ûWHICHûPUSHESû
out the company’s maturities by three years
TOû!UGUSTû
Leads were able to bring talk in by 13bp
FROMûTHEû'ILTSûPLUSûBPûAREAû)04SûANDû
could comfortably upsize from the £250m
initially marketed.
!NûINVESTORûSAIDûTHEûTRADEûMAYûBEûTOOûMUCHû
DURATIONûFORûHIMûTOûTAKE ûBUTûTHATûPRICINGû
LOOKEDûGOODûVALUEûATûTHEûSTARTINGûLEVELS
7ALESûû7EST ûRATEDû!
ûBYû30ûANDû&ITCH û
has not been in the market since raising
£400m from 12 and long 16-year outings in
October 2011. The 2023s were quoted at
'ILTSûPLUSûBPûANDûTHEûSûATûBPûPRE
MANDATEûLASTû-ONDAY ûACCORDINGûTOû
4RADEWEBûPRICES ûTHOUGHûTHEûLATTERûWEREûBIDû
5bp or 6bp wider by the end of the week.
While the issue was coming alongside a
TENDERûOFFERûFORûITSûaMûû.OVEMBERû
S ûTHEûRESULTSûOFûTHEûMAXIMUMûaMû
offer will not be announced until
Wednesday.
Barclays ûBNP Paribas and NatWest Markets
are dealer-managers on the tender and were
ACTIVEûBOOKSûONûTHEûNEWûISSUE
It was last week’s second sterling
BENCHMARKû#ONNECTû0LUSû- ûONû4UESDAYû
found orders of £1.9bn for its chunky
aMû-ARCHûûAMORTISERû
ûTHEû
currency’s largest corporate trade of the
year (see separate story).

)NûAûRESEARCHûNOTEûLASTûWEEKû*0û-ORGANû

analysts said domestic sterling credit is

CONSIDEREDûAûHAVENûBYû5+ûINVESTORSûWITHû

RETAILûFUNDSûSEEINGûaBNûINûYEARûTO

DATEû

INmOWSûDESPITEûTHEû"REXITûNEWS

h(OWEVERûIFûAûTAIL

RISKûSCENARIOûDOESû

emerge (either ‘no deal’ or a Corbyn

GOVERNMENT  ûWEûEXPECTûDOMESTICûNAMESûTOû

BEGINûTOûPRICEûINûAûSIGNIlCANTLYûHIGHERûRISKû

PREMIUMvûTHEYûSAID

NON-CORE CURRENCIES

MONASH UNI REVISITS CLIMATE BONDS

MONASH UNIVERSITYûISûPLANNINGûTOûSELLû!Mû

53M ûOFû#LIMATEûBONDSûINûAû53ûPRIVATEû

placement.

4HEû

YEARûSENIORûUNSECUREDûlXED

RATEû

TRANSACTIONûITSûTHIRDû#LIMATEûBONDûOFFERINGû

ISûEXPECTEDûTOûBEûPRICEDûBYûTHEûENDûOFûTHISû

month and close in October.

Moody’s has assigned the proposed bonds

Aû'"û'REENûRATINGû-ONASHûISûRATEDû!Aû

with a stable outlook.

0ROCEEDSûWILLûPRIMARILYûlNANCEûAûNEWû

TECHNOLOGYûEDUCATIONûBUILDINGûWHICHûHASû

been designed to reduce emissions.

-ONASHûISû!USTRALIASûLARGESTûUNIVERSITYûINû

terms of enrolments.

BLACKSTONE SEEKS TO BUY

INVESTA MTNS

"LACKSTONEû'ROUPSû1UARTZû&INANCEû#Oû)ûISû

SEEKINGûTOûBUYûALLû!Mû53M  ûOFû

'REENû-4.SûDUEû!PRILûûûISSUEDûINû

-ARCHûûBYûTHEûINVESTA OFFICE FUND.

The conditional purchase of the notes is

SUBJECTûTOûTHEûSUCCESSFULûlNALISATIONûOFû

Blackstone’s acquisition of all units in the

)NVESTAû/FlCEû&UNDûANDûTHEûAGREEMENTûOFûTHEû

noteholders to liquidate their bond holdings.

NAB is coordinating the purchase of the

notes.

)Nû*UNEû"LACKSTONEûENTEREDûINTOûANû

AGREEMENTûTOûBUYû)NVESTAû/FlCEû&UNDûAû

2%)4ûFOCUSEDûONû!USTRALIANûOFlCEûBUILDINGSû

FORû!BN

FIG

US DOLLARS

NATIONWIDE BUILDS MREL BUFFER WITH

SNP RETURN

NATIONWIDE BUILDING SOCIETY returned for its

second senior non-preferred trade last

7EDNESDAYûTAKINGûADVANTAGEûOFûIMPROVINGû

CONDITIONSûFORûHIGH

RATEDûlNANCIALûISSUERSûINû

the US dollar market.

4HEû5+ûMUTUALûPRINTEDûAû53BNûSIX

YEARû

NON

CALLûlVEûlXED

TO

mOATINGûNOTEûTHATûCAMEû

15bp inside initial price thoughts.

4HEû!2EGû3ûOFFERINGûBEGANûATûBPû

AREAûOVERû4REASURIESûWITHûLEADSûLATERû

ANNOUNCINGûGUIDANCEûOFûPLUSûBPûnBP   û

ASûBOOKSûGREWûINûEXCESSûOFû53BN

4HEREûWASûAûBITûOFûPRICEûSENSITIVITYûBUTû

STILLû.ATIONWIDEûWASûABLEûTOûPRICEûATûTHEû

TIGHTûENDûOFFûAûlNALûBOOKûOFû53BN

Leads reckoned the premium was 9bp.

Last week’s offering followed

Nationwide’s debut in the senior non-

PREFERREDûFORMATûINû-ARCHûWHICHûWASûAû

dual-currency offering in euros and dollars.

4HATûõBN

EQUIVALENTûTRIPLE

TRANCHEû

transaction comprised a €1bn eight-year

NON

CALLûSEVENûEUROûBONDûAû53BNûSIX

YEARû

NON

CALLûlVEûANDûAû53Mû

YEARûNON

CALLû

10.

Combined demand for the US dollar

TRANCHESûWASûJUSTû53BNûREmECTINGû

tougher issuance conditions at the time.

4HEûTWOûDOLLARûBONDSûHAVEûSTRUGGLEDû

SUBSEQUENTLYûWITHûTHEû-ARCHûSûQUOTEDû

ATûAû'

SPREADûOFûBPûHAVINGûPRICEDûATû

4REASURIESûPLUSûBPûANDûTHEû-ARCHûSû

ATûBPûFROMûAû4REASURIESûPLUSûBPû

launch.

Nationwide is following the senior non-

PREFERREDûFORMATûALREADYûADOPTEDûBYûVARIOUSû

%UROPEANûPEERSûASûTHEûMOSTûCOST

EFlCIENTû

way to meet loss-absorbing rules known as

MREL (minimum requirement for own

funds and eligible liabilities) in Europe.

7HILEû5+ûBANKSûHAVEûMETûTHEIRûTARGETSûBYû

issuing structurally subordinated MREL

FROMûHOLDINGûCOMPANIESûTHISûOPTIONûISûNOTû

FEASIBLEûFORûBUILDINGûSOCIETIESûWHICHûAREû

MUTUALLYûOWNEDûNOTûPUBLICûCOMPANIES

Nationwide’s MREL shortfall was around

aBNûATûTHEûENDûOFûûSOûITûTACKLEDûITSû

DElCITûTHROUGHûTHEû-ARCHûTRANSACTIONû

although it always intended to retain a

BUFFERûOVERûITSûMINIMUMûREQUIREMENTS

Bank of America Merrill LynchûBarclaysû

Citigroup and JP Morgan were the leads on last

WEEKSûDEALû4HEûNOTESûAREûEXPECTEDûTOûBEû

RATEDû"AA"""!û.ATIONWIDESûEXPECTEDû

ISSUERûRATINGSûAREû!A!!

CONDITIONS CONTINUE TO FAVOUR BANK

ISSUANCE

"ANKSûWEREûOUTûINûFORCEûAGAINûLASTûWEEKû

many fresh from releasing quarter results.

The banks - FIFTH THIRD BANKûPNC BANK and

SUNTRUST BANK - also found a strong reception

FROMûANûINVESTORûBASEûTHATûISûSHOWINGûAû

preference for higher-rated quality paper

AMIDSTûVOLATILITY

)NûRECENTûWEEKSûASûBROADERûMARKETSûHAVEû

TURNEDûVOLATILEûONûCONCERNSûABOUTûAûTRADEû