COUNTRY REPORT
Australia 20 China 21 Hong Kong 27 India 29 Indonesia 30 Japan 31 Macau 32 Malaysia 32 Mongolia 33
Myanmar 33 New Zealand 33 Philippines 34 Singapore 34 South Korea 35 Taiwan 36 Thailand 38 Vietnam 39AUSTRALIA
DEBT CAPITAL MARKETS
› MACQUARIE SLOW ON YANKEE RETURN
MACQUARIE GROUP (A3/BBB/A–) chose an
unfortunate day to return to the US bond
market, as a spike in US rates prompted a
reassessment of risk assets which included
a substantial Wall Street sell-off.
The Australian financial raised US$850m
from a 5.033% 11.25-year non-call 10.25
144A/Reg S bond issue on October 4 having
attracted a US$1.2bn order book.
Such modest demand meant joint
bookrunners Bank of America Merrill Lynch,
Citigroup, HSBC, JP Morgan, Wells Fargo and
Macquarie Capital (USA) were only able to
move 5bp on from 190bp area initial price
thoughts to price 185bp wide of Treasuries.
This represented a sizeable 20bp new-issue
concession over the group’s 4.654% March
2029s.
“Macquarie was unlucky on the day
given what was going on in the US rates
and equity markets. There is elevated
demand at present for risk-free returns
in excess of 3%, though ultimately higher
Treasury yields should lead to credit spread
compression,” said a banker close to the
deal.
Macquarie Group also confronted a
difficult market backdrop for its previous
Yankee sale on March 19, a US$1.75bn
three-part trade that employed the same
six leads.
The US$700m 4.15% six-year non-call
five and US$500m 4.654% 11-year non-call
10 notes priced 150bp and 180bp wide
of Treasuries for respective new-issue
concessions of 8bp and 15bp. A US$550m
six-year non-call five floating-rate note
priced 135bp wide of three-month Libor.
The total order book for that
transaction was US$2.5bn, less than half
the US$5.1bn of demand secured for an
identical three-tranche Macquarie Group
offering in November 2017, which raised
US$2.5bn at Treasuries plus 110bp and
140bp and new-issue concessions of just
4bp and 5bp.
Macquarie Group’s use of callable
instruments reflects its conservative
internal liquidity rules, under which bonds
are no longer treated as term debt when
maturities fall below 12 months.
› BARMINCO WINS APPROVALBARMINCO FINANCE said it had won consent
from the required majority of bondholders
to amend certain terms of its US$350m
6.625% senior secured notes due 2022.
The amendment will change the
indenture of the bonds so that AUSDRILL’s
proposed acquisition of Barminco Holdings,
the parent company of the issuer, will not
constitute a change of control requiring the
bonds to be redeemed at 101% of face value.
Barminco will pay US$2.50 per US$1,000 in
principal amount to consenting bondholders.
HSBC was the solicitation agent for the
offer.
Barminco Holdings is an Australia-
headquartered hard-rock contract mining
company, while Ausdrill is a diversified
mining services company.› BEN BANK PRINTS A$500M FLOATERBENDIGO AND ADELAIDE BANK (A3/BBB+/A–) raised
A$500m (US$355m) from last Tuesday’s sale
of 3.25-year floating-rate notes via joint lead
managers ANZ, NAB and Nomura.
The January 19 2022s priced inside 103bp
area guidance at three-month BBSW plus
101bp.
The regional lender also raised A$500m
from its previous domestic senior
unsecured issue on January 16 2018, a dual-
tranche five-year offering priced 105bp
wide of three-month BBSW and asset
swaps.› KDB EXTENDS KANGAROO CURVEKOREA DEVELOPMENT BANK (Aa2/AA/AA–)
returned to the Kangaroo market after a
near two year absence with last Friday’s
A$400m five-year floating-rate note issue
arranged by joint lead managers ANZ, TD
Securities and UBS.
The October 19 2023s priced at par,
inside 100bp-103bp guidance at three-
month BBSW plus 98bp.
Unlike Kangaroos, local bank issues
are repo-eligible and thus benefit from a
sizeable bank balance sheet bid.
KDB previously issued a A$300m three-
year Kangaroo FRN in November 2016 that
priced at three-month BBSW plus 103bp.› CENTURIA MAKES UNRATED RETURNCENTURIA CAPITAL NO 2 FUND, a wholly owned
unrated subsidiary of Centuria Capital
Group, raised A$80m from last Thursday’sdual-tranche 4.5-year senior secured MTN
issue via sole lead NAB.
A A$45m 6.50% fixed-rate tranche priced
at par and a A$35m floating-rate note at
three-month BBSW plus 425bp, both in line
with guidance.
In April 2017, Centuria Capital Group
raised A$100m from a dual-tranche four-
year sale of unrated wholesale corporate
notes.
The A$60m 7.0% April 21 2021s priced
at par and the A$40m FRN at three-month
BBSW plus 450bp.
Centuria Capital Group is an ASX-listed
specialist investment manager with
A$4.9bn assets under management as of
June 30 2018.› IFC INCREASES 2027S TO A$1BNINTERNATIONAL FINANCE CORP, rated Aaa/AAA
(Moody’s/S&P), tapped its 3.2% October 18
2027 Kangaroo for A$75m last Wednesday
to bring the size of the bond up to a round
A$1bn.
The reopening, via sole lead TD Securities,
priced at 100.467 to yield 3.14%, 40bp wide
of asset swaps and 48.25bp over the April
2027 ACGB.› LENDLEASE MARKETS AUSSIE ISSUELENDLEASE GROUP, rated Baa3/BBB- (Moody’s/
Fitch), has mandated ANZ, HSBC and
Westpac to arrange Asian and Australian
investor meetings from October 16 for a
potential Australian dollar bond issue.
The roadshow takes in Singapore on
October 16 and 17, Hong Kong on October
18, Sydney on October 22 and Melbourne
on October 25.
In May 2016, Lendlease Group sold a
US$400m 4.5% 10-year Reg S bond off its
EMTN programme.
A year later, Lendlease Real Estate
Investments, rated A+ (S&P), raised A$200m
from a seven-year MTN, priced 130bp wide
of asset swaps.
Lendlease is a Sydney-based leading
international property and infrastructure
group, with operations in Australia, Asia,
Europe and the Americas.› QTC 2029 BOND RAISES A$2.25BNQUEENSLAND TREASURY CORP, rated Aa1/AA+
(Moody’s/S&P), raised a hefty A$2.25bn
from last Thursday’s initial issue of the new
rule 144A-eligible 3.25% August 21 2029
benchmark bond line.