COUNTRY REPORT NEW ZEALANDthe T2 notes at A1 and the AT1 notes at A3.
The bank capital notes, which will include
loss-absorption features if the bank is
declared not viable, will be compliant with
Basel III rules.
The Islamic bank received three
capital injections from parent Affin Bank
amounting to M$100m each in 2015 and
2016, and M$500m in 2017. Its common
equity Tier 1 capital ratio was 11.1% as of
end-June.
Affin Bank sold M$500m of AT1 notes in
July at 5.8%, drawing strong demand that
exceeded M$1bn in orders.
› CIMB GROUP SELLS AT1 NOTES
CIMB GROUP HOLDINGS returned to the ringgit
bond market last Wednesday to price
M$1bn of perpetual non-call five notes at
5.4%.
The bonds, which will qualify as Basel III-
compliant Additional Tier 1 notes, priced at
the low end of the price guidance range of
5.4%-5.5%, reflecting robust demand and a
wider acceptance of the most risky of bank
capital structures.
The AT1 issue follows a M$500m AT1
5.8% bond sold by Affin Bank in July that
attracted strong orders of over M$1bn.
“This shows that more investors are
shedding their concerns over certain
restrictive terms in AT1 issues and coming
to accept sub-debt as much as they do plain
vanilla bonds,” said one banker.
Final books for CIMB Group’s new AT1s
were double the issue size from a wide
spread of investors, but the Malaysian
financial institution was unable to increase
the issue size because of regulatory limits.
The AT1 notes are rated A1 by Ram,
three notches below CIMB Group’s AA1
rating to reflect the deep subordination of
the notes.
CIMB Group needed to replenish its
capital as it had redeemed a M$1bn 6.7%
innovative Tier 1 Basel II bond in early
October. Proceeds will be used to purchase
a M$1bn AT1 perpNC5 bond that will be
issued by unit CIMB BANK.
CIMB Investment Bank is sole lead manager.
Settlement is on October 23.
CIMB Group raised M$1.2bn in 11NC6
Tier 2 bonds priced at 4.88% at end-August.
› CAGAMAS RETURNS FOR MORE BONDS
CAGAMAS has raised M$1.55bn in two
issuances of three-year bonds. A M$800m
three-year conventional bond was priced
at par to yield 4.1% while a M$750m three-
year sukuk was priced tighter at 4.08%,
suggesting that demand was strong from
Islamic funds.
Both pricings represented a weighted
average price of 4.09% with a spread of
49bp over Malaysian government securities.
A Cagamas statement said the bonds
attracted orders from a wide spread of
investors including sovereign wealth funds,
financial institutions, and local and foreign
asset managers.
CIMB Investment Bank, HSBC Bank Malaysia
and Maybank were co-managers for the self-
led deal.
The notes, settled last Monday, bring
Cagamas’ year-to-date issuance to
M$12.3bn, including M$3bn of commercial
paper and M$650m-equivalent in foreign
currency denominated bonds.
Proceeds will be used to fund the
purchases of mortgage loans and Islamic
home financing from banks.
The Malaysian state-owned mortgage
corporation is rated AAA by RAM and Marc
and is typically seen as a proxy for the
sovereign credit.MONGOLIA
DEBT CAPITAL MARKETS
› DBM PICKS THREE BANKS FOR US$ SENIORDEVELOPMENT BANK OF MONGOLIA, rated B3/B–/B,
has hired HSBC, JP Morgan and Morgan
Stanley as joint lead managers and joint
bookrunners for a proposed 144A/Reg S US
dollar-denominated senior bond offering,
subject to market conditions.
The Mongolian state-owned policy bank
has held fixed income investor meetings
and calls in Hong Kong, Singapore, London,
Boston and New York since October 8.
The proposed notes have expected
ratings of B–/B (S&P/Fitch).MYANMAR
SYNDICATED LOANS
› PAMEL DIALS IN FOR LBO LOANPAN ASIA MAJESTIC EAGLE, a Myanmar-based
telecom infrastructure firm, is in the
market for a five-year loan of up to
US$185m that will fund its leveraged
buyout and refinance debt.
DBS Bank, ING Bank and OCBC Bank are the
mandated lead arrangers, bookrunners and
equal underwriters of the loan, which was
launched into general syndication a fewweeks ago.
Pamel Holdings, a Cayman Islands-
incorporated special purpose vehicle and
the acquiring entity, is the borrower on the
loan, which pays an all-in pricing of 450bp–
500bp and has an average life of 4.25 years.
Roadshows were held in Singapore on
September 20 and Yangon on September- The deadline for responses is the end of
this month.
Private equity firm TPG Capital has
completed the LBO, acquiring 100%
of Pamel, which will complement its
existing Myanmar telecom tower asset,
Apollo Towers. The Pamel-Apollo Towers
combine is expected to have more than
3,000 telecom towers in Myanmar and an
enterprise value of at least US$700m.
Pamel’s previous visit to the loan
markets was in August last year for a
US$60m five-year refinancing of its debut
loan completed in 2014. DBS, ING and
OCBC were the lenders on that refinancing,
which had an average life of around four
years and paid tighter pricing than the
previous transaction.
Yangon-headquartered Pamel was
established in 2013. Its previous
shareholders included investors such as
Qatar’s Ooredoo, hedge fund Farallon
Capital (formerly Noonday Asset
Management), and Michael Gearon and
Peter Egbertsen, who were the former
founding shareholders of telecom tower
firm Profesional Telekomunikasi Indonesia
(Protelindo).
NEW ZEALAND
DEBT CAPITAL MARKETS
› HNZL DUAL-TRANCHER RAISES NZ$300MHOUSING NEW ZEALAND, rated AA+ (S&P),
raised the maximum combined NZ$300m
(US$196m) it was seeking from last Friday’s
dual-tranche local bond offer via joint lead
managers ANZ, BNZ and Westpac.
A new NZ$250m 3.42% 10-year bond
priced at par, at the tight end of initial mid-
swaps plus 50bp–57bp guidance and 78bp
wide of the April 2029 NZGB.
A NZ$50m increase to the 2.97% June
12 2023s, which took the issue size up to
NZ$300m, priced at 101.916963 for a yield
of 2.53%. This was at the tight end of mid-
swaps plus 17bp–19bp initial guidance and
52.75bp over the April 2023 NZGB.
The leads were able to deliver such tight
pricing thanks to hefty investor demand
with over NZ$350m of orders received