“More than A$4.2bn of bank debt was
raised as part of the acquisition financing,
with the first maturity due in October 2019,
which Fitch expects to be refinanced
through the capital markets,” Fitch wrote in
April this year.FIG
US DOLLARS
FIGs GENERATE SOLID INTERESTCREDIT SUISSE was inundated with more than
US$8bn in investor demand on Wednesday
for a perpetual non-call seven-year
Additional Tier 1 bond, reflecting strong
buyside interest for Yankee bank debt.
The deal, the second perpetual trade
issued by the Swiss bank in the past couple
of months, was sized at US$1.5bn and priced
25bp inside initial price talk, at 7.25%.
That coupon was lower than that offered
on its last perpetual from July, a US$2bn
issue that is callable after five years and pays
interest at a rate of 7.5%.
The July trade has since rallied, yielding
around 6.76% on Wednesday. While that
indicated a generous new issue concession
on the new deal, Credit Suisse is still
expected to save money over the long term.
“The bank might not mind the concession
because it just came to the market a few months
back and is looking to replace legacy capital that
had coupons over 9%,” said one banker.
Credit Suisse is calling over SFr6bn
(US$6.2bn) of securities with coupons of 9%-
9.5% in the third quarter and is looking to
replace almost half of it with cheaper debt,
like the one done on Wednesday.
“We’ve been quite public about it,” said a
banker close to the deal. “We had just over
SFr6bn of calls that we announced recently
and it was always in our plan to do not quite
all of it, but close to half of that in
refinancing this year.
“We did the dollar trade and thought the
market’s good, and our bond obviously
performed well, so we’re just trying to get
the rest done before the end of the year.”
The large book was also seen as an
indication of what seems to be a continued
strong bid for FIG paper.BAKER’S DOZENCredit Suisse was among a total of 13 high-
grade deals in the primary market on
Wednesday, six of which were FIG issuers.
“Demand for FIG paper remains robust in
the dollar market, especially for capitalproducts, which are generally yieldier than
other forms of debt,” the banker said.
MIZUHO FINANCIAL GROUP was also in the
market, with a three-part TLAC-eligible
US$2.75bn deal, comprising a US$650m
6NC5 fixed to FRN, a US$1bn 6NC5 FRN and
a US$1.1bn 11NC10 fixed to FRN.
The pricing levels were 15bp-20bp inside
initial price talk, and offered concessions of
about 12bp over the Japanese bank’s
outstanding bonds.
“Mizuho’s previous TLAC issues were not
issued in this format and we think they are
doing this now because of the advantage to
issuing banks of being able to call back the
bonds before they lose eligibility as TLAC
(once they have less than one year to
maturity),” wrote CreditSights.
Mizuho followed compatriot MITSUBISHI UFJ
FINANCIAL GROUP into the market, the A1/A-/A
rated issuer having priced US$3bn in new
paper the previous day.
The offering comprised a US$1bn 10-year
new issue, priced at Treasuries plus 115bp,
inside initial price thoughts of plus 125bp-
130bp, and two taps: a US$1.15bn reopening
of a five-year fixed-rate tranche at Treasuries
plus 95bp, inside IPTs of 105bp-110bp, and aUS$850m increase of a five-year floater at
three-month Libor plus 81bp.
For its part, France’s BPCE offered a three-part
senior non-preferred trade that priced as a
US$2bn deal, coming some 20bp tighter than
initial price talk on the shorter dated tranche.
Concessions were roughly 4.5bp on a
US$750m five-year fixed at Treasuries plus
137.5bp and 2bp on a US$750m 10-year
fixed that launched at 180bp. BPCE also
issued US$500m in five-year floaters.
“The pricing looks good on the fives,
maybe a bit less compelling versus euros on
10s, but they like the duration and the
diversification,” said a lead manager.
Meanwhile, HSBC HOLDINGS priced what was
the week’s largest FIG trade, a US$5.25bn
three-parter consisting of three non-call two
floaters, eight non-call seven fixed to floaters
and eight non-call seven floaters. The final
levels were 10bp-20bp inside initial price
talk, which meant the fixed bonds offered a
meagre 3bp in concession.
On the domestic front, VOYA FINANCIAL
priced a US$325m perpetual non-call five
trade with a 6.125% coupon and a back-end
spread of Treasuries plus 335.8bp on books
that topped US$1.2bn.International Financing Review September 8 2018 35BONDS FIG
ALL FINANCIAL INSTITUTION BONDS IN EUROS
BOOKRUNNERS: 1/1/2018 TO DATE
Managing No of Total Share
bank or group issues €(m) (%)
1 BNP Paribas 54 14,256. 28 9 .9
2 UBS 31 13,040.40 9 .0
3 HSBC 48 11,041.71 7 .6
4 Deutsche Bank 42 10,021.36 6.9
5 SG 32 8,080.54 5.6
6 Credit Agricole 24 6,845.51 4 .7
7 JP Morgan 36 6,409.08 4 .4
8 Natixis 20 6,275. 48 4 .3
9 Morgan Stanley 27 5,829.40 4 .0
10 Citigroup 25 5,271.67 3. 7
Total 236 144,366.50
Including banks, insurance companies and finance companies. Excluding equity-related and covered bonds. Excluding publicly owned institutions.Source: Thomson Reuters SDC code: N11ALL SUBORDINATED FINANCIAL INSTITUTION
BONDS (ALL CURRENCIES)
BOOKRUNNERS: 1/1/2018 TO DATE
Managing No of Total Share
bank or group issues US$(m) (%)
1 Barclays 11 4,367.11 7 .9
2 JP Morgan 23 3,812.78 6.9
3 Morgan Stanley 19 3,455.29 6.3
4 BNP Paribas 15 3,108.26 5. 7
5 SG 9 3,106.55 5.6
6 HSBC 20 2,976.89 5. 4
7 Credit Suisse 13 2,976.34 5. 4
8 BAML 16 2,664.60 4 .8
9 Citigroup 16 2,472.64 4 .5
10 UBS 13 2,370.96 4 .3
Total 84 54,990.49Source: Thomson Reuters SDC code: J3aALL GLOBAL AND EUROMARKET YEN BONDS
BOOKRUNNERS: 1/1/2018 TO DATE
Managing No of Total Share
bank or group issues ¥(m) (%)
1 Nomura 11 111,233.33 2 4.3
2 Sumitomo Mitsui Finl 7 7 1,650.03 15. 7
3 Mizuho 10 55,433.36 12. 1
4 Daiwa Securities 8 3 1,916.67 7 .0
5 BAML 2 3 1,833.33 7 .0
6 MUFG 2 2 9,833.33 6.5
7 Goldman Sachs 2 18,000.00 3.9
8 Mitsubishi UFJ MS 3 16,666.67 3.6
9 HSBC 2 15,000.00 3.3
10 Barclays 4 11,650.00 2.5
Total 33 4 57,610.30
Excluding equity-related debt. Including preferreds.
Source: Thomson Reuters SDC code: K10ALL SAMURAI BONDS
BOOKRUNNERS: 1/1/2018 TO DATE
Managing No of Total Share
bank or group issues ¥(m) (%)
1 Sumitomo Mitsui Finl 32 32 9,066.67 21. 2
2 Mizuho 37 3 14,720.00 2 0.3
3 Mitsubishi UFJ MS 35 283,761.67 18.3
4 Daiwa Securities 31 2 42,511.67 15.6
5 Nomura 30 219,970.00 14 .2
6 Natixis 11 47 ,120.00 3. 0
7 BAML 3 4 6,666.67 3. 0
8 HSBC 1 19,825. 00 1.3
9 Citigroup 5 17 ,333.33 1. 1
10 BNP Paribas 3 16,125.00 1. 0
Total 48 1,551,600.00
Excluding equity-related debt.
Source: Thomson Reuters SDC code: K116 Bonds 2250 p25-55.indd 35 07/09/2018 19:29:59