IFR International - 28.07.2018

LOANS ASIA-PACIFIC

Tranche A is further split into a
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portion.
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YEARûTRANCHESûOFFEREDû
TOP
LEVELûALL
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4.01 years.
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giant BBAM.
Mandated lead arrangers and
bookrunners are BNP Paribas, Citigroup,
Commonwealth Bank of Australia, Deutsche
Bank, MUFG Union Bank and First Abu Dhabi
Bank. Mandated lead arrangers are Fifth
Third Bank and Korea Development Bank.
Participants are Societe Generale, KeyBank,
National Australia Bank, TIAA Bank, DVB Bank,
First Commercial Bank, Bank of East Asia, Chang
Hwa Commercial Bank, E. Sun Commercial Bank
and Columbia State Bank.

TAIWAN

QUANTA COMPUTER INCREASES LOAN

QUANTA COMPUTER has increased a three-year

loan to US$880m from the US$550m target

after attracting 19 banks in general

syndication.

Mizuho Bank was the mandated lead

arranger and bookrunner of the transaction,

WHICHûCOMPRISESûAû53Mû4RANCHEû!ûFORû

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Cayman-incorporated subsidiary QUANTA

INTERNATIONAL.

The interest margins for Tranches A and B

AREûBPûANDûBPûOVERû,IBORûRESPECTIVELYû

The Taiwanese notebook computer maker

will pay any excess interest rate beyond a

BPûDIFFERENCEûBETWEENû4!)&8ûANDû,IBOR

"ANKSûJOININGûASû-,!"SûWEREûOFFEREDûAû

top-level upfront fee of 15bp. Funds are to

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working capital purposes.

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a three-year tenor with a two-year extension

option and offered a margin of 108bp over

THREEûORûSIX

MONTHû,IBORû4HEûBORROWERû

would pay any excess interest rate beyond a

BPûDIFFERENCEûBETWEENû4!)&8ûANDû,IBOR

Mandated lead arrangers and

bookrunners are Mizuho Bank, HSBC,

Metrobank, MUFG, United Overseas Bank, Bank of

China Taipei, Bank of Communications Taipei,

Bank of Taiwan, Cathay United Bank, Chang Hwa

Commercial Bank, E Sun Commercial Bank, First

Commercial Bank, Hua Nan Commercial Bank,

Land Bank of Taiwan, Mega International

Commercial Bank and Taiwan Cooperative Bank.

Mandated lead arrangers are Taishin

International Bank, EnTie Commercial Bank and

Shanghai Commercial & Savings Bank. Sumitomo

Mitsui Banking Corp is a participant.

MAO TE SEEKS NT$7bn RECAP LOAN

4AIWAN

BASEDûINVESTMENTûlRMûMAO TE

INTERNATIONAL INVESTMENT is seeking a

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KKR targets record LBO

„ TAIWAN Goldman Sachs underwrites US$1bn LCY loan in KKR’s first Taiwanese buyout

KKR is to borrow around US$1bn to support

its leveraged buyout of Taipei-listed speciality

chemicals producer LCY CHEMICAL, braving a

challenging regulatory environment that has

curbed private equity dealmaking to date.

The NT$47.8bn (US$1.56bn) buyout of LCY

Chemical is set to be the largest private equity-

backed acquisition in Taiwan. KKR is heading a

consortium of investors, including employees

and family members.

Goldman Sachs is underwriting and

arranging the debt financing, and Taiwan’s

liquid banks are awaiting news of any

syndication with interest, given the country’s

previous lack of buyout loans.

The island’s leveraged finance industry is

littered with failed deals due to lengthy review

periods and scrutiny from multiple regulators.

“There has been little global private equity

interest in Taiwan over the past couple of years,”

a Taipei-based senior loans banker said.

KKR last attempted a buyout in Taiwan in

April 2011, but local regulators blocked its

US$1.6bn bid to take electronic component

manufacturer Yageo private, citing insufficient

protection of minority shareholder rights, among

other reasons.

A NT$31.1bn debt package was syndicated

in May that year and raised an oversubscription

that allowed joint bookrunners and underwriters

UBS and Nomura to cut pricing on the deal

through a reverse flex.

Despite cutting the margin by 30bp to 220bp

over the secondary CP rate, nearly 20 banks joined

the financing, but Taiwanese regulators rejected

the buyout after lengthy reviews in June 2011.

“Our government was not in favour of global

PE firms’ buyouts of high-profile companies

in the past as they were concerned about

the foreign investors’ long term operational

commitment and the investment’s impact on

competition within the sector,” a second loan

banker from a Taiwanese state-owned bank said.

EXIT HURDLES

Several other private equity buyouts have run

into similar objections from Taiwanese regulators

more recently, most notably a string of buyouts

in the cable television industry.

In January, Carlyle Group finally sold a 62.4%

stake in cable TV operator Eastern Broadcasting

to Taiwanese investment firm MAO TE

INTERNATIONAL, which is owned by local property

tycoon Chang Kao-shiang, for NT$11.4bn after

several attempts.

CTBC Bank is leading a NT$7bn five-year loan

for Mao Te. (See Taiwan Syndicated Loans.)

“It took a long time for Carlyle to get an exit

as Taiwan’s regulators take a cautious approach

to approving foreign investment in or exiting

certain sensitive industries such as public

utilities and the media sector ... which can also

lead to delays in the approval process,” a third

loan banker in Taipei said.

Carlyle acquired the controlling stake in EBC

in 2006 from the ex-chairman of Eastern Media

International for an undisclosed sum. Carlyle and

Eastern Media International (21.32%) have tried

repeatedly to offload their stakes since mid 2015.

Before the successful sale to Mao Te, the

pair’s last attempt was in June 2017, but Taiwan’s

National Communications Commission blocked

telecommunication services provider Taiwan

Optical Platform Group’s proposed purchase of a

65% stake in EBC.

Four lenders, including sole lead CTBC Bank,

were expected to complete a NT$13.5bn club

loan for Taiwan Optical’s buyout.

In 2016, Dan Mintz, a producer of Hollywood

films including Iron Man 3, backed out, seven

months after announcing an agreement with

Carlyle and Eastern Media International to buy

their combined 82.2% stake in EBC in December

2015.

In February 2017, South Korean private equity

firm MBK Partners also suffered a blow to its

plan to sell its stake in cable TV company China

Network Systems.

Taiwan’s Far EasTone Telecommunications

and Morgan Stanley Private Equity Asia

withdrew a joint bid for CNS, which disappointed

lenders who had committed to a NT$46.8bn

loan backing the buyout.

That deal also suffered a drawn-out

regulatory process that lasted nearly 20 months.

Evelynn Lin