IFR International - 03.11.2018

ASIA-PACIFIC

CHINA

SHANDONG GUOHUI PRINTS CHUNKY
363-DAY ISSUE

SHANDONG GUOHUI INVESTMENTûTHEûPROVINCIALû
state-owned investment company of China’s
EASTERNû3HANDONGûPROVINCEûLASTû7EDNESDAYû
priced US$600m of 363-day notes at par to
YIELDûûINûLINEûWITHûPRICEûGUIDANCE
The deal was sizeable for an unrated Reg S
ISSUEûESPECIALLYûGIVENûTHEûWEAKûMARKETû4HEû
INITIALûFUNDRAISINGûTARGETûWASû53MûBUTû
solid demand allowed the issuer to raise
MOREûASûNOTESûOFûLESSûTHANûONEûYEARûAREûNOTû
SUBJECTûTOû#HINESEûREGULATORYûQUOTASûAû
banker on the deal said.
“The short tenor and high yield attracted
investors. The recent issues of new dollar
bonds of other provincial entities offered
AROUNDûûFORûTHREEûYEARSûBUTûTHISûONEûGAVEû
vûANOTHERûBANKERûONûTHEûDEALûSAID
)NVESTORSûWEREûMOSTLYûONSHOREûBANKSûBUTû
SOMEûINTERNATIONALûFUNDSûALSOûPARTICIPATEDû
according to the banker.
The latest issue was Shandong Guohui’s
second offshore bond sale after it priced
US$188m of 363-day notes at 5.7% in
September.
The banker said Shandong Guohui wants
to expand its presence in offshore capital
MARKETSûPARTLYûASûAûWAYûTOûPROMOTEû
investment in the province.
The company is in the process of getting
RATINGSûFROMûGLOBALûAGENCIESûHEûADDED
%STABLISHEDûINû*ANUARYûû3HANDONGû
Guohui plays a strategic role in the reform
and restructuring of SOEs in Shandong
province. It owns equity in SOEs involved in
TRANSPORTATIONûENGINEERINGûANDûlNANCIALû
and operating leasing.

h)TSûDElNITELYûANû)'û;INVESTMENT

GRADE=û

name but it’s not clear just what ratings it

could get. It holds stakes in many big SOEs

in the province like Shandong Gold Mining

ANDû3HANDONGû)RONûANDû3TEELû'ROUPûSOû

CREDITûFUNDAMENTALSûAREûNOTûAûCONCERNvûTHEû

lRSTûBANKERûONûTHEûDEALûSAID

.OûBOOKûSTATISTICSûWEREûPROVIDEDû"UTû

ORDERSûWEREûSAIDûTOûBEûOVERû53Mû

INCLUDINGûINTERESTûFROMûLEADSûATûTHEûTIMEûOFû

RELEASINGûlNALûGUIDANCE

3TILLûITûISûMOREûCOSTLYûFORû3HANDONGû

Guohui to issue bonds offshore than

ONSHOREû&ORûCOMPARISONûITûPRIVATELYûPLACEDû

Rmb3bn (US$430m) of three-year corporate

bonds at 5.68% on the Shanghai Stock

Exchange on October 26.

The newly issued 363-day notes were not

actively traded and were quoted at around

REOFFERûONû4HURSDAYûMORNINGûACCORDINGûTOûAû

trader.

/FFSHOREû"6)ûSUBSIDIARYû'UOHUIû

International is the issuer and Shandong

Guohui is the guarantor.

Central Wealth Securities Investment and Bank

of ChinaûWEREûJOINTûGLOBALûCOORDINATORSûJOINTû

lead managers and joint bookrunners on its

latest transaction.

Zhongtai InternationalûCCB Internationalû

Haitong InternationalûHuatai Financial Holdings

(Hong Kong)ûIndustrial Bank Hong Kong branchû

China Citic Bank InternationalûPing An of China

Securities (Hong Kong) and China Everbright Bank

Hong Kong branch were joint bookrunners.

Huaxia Bank Shanghai Pilot Free Trade Zone

branch was lead manager in relation to PRC

matters.

OCEANWIDE SELLS US$215m BONDS

Chinese property developer OCEANWIDE

HOLDINGSûRATEDû###ûNEGATIVE  "nûSTABLE û

30&ITCH  ûLASTû-ONDAYûSOLDû53MûOFû

three-year non-put 1.5 US dollar bonds to

RElNANCEûOFFSHOREûDEBT

4HEû2EGû3ûBONDSûWEREûSOLDûATûPARûWHICHûGAVEû

AûûYIELDûTOûMATURITYûINûLINEûWITHûPRICEû

guidance. The bonds are puttable at 104.05 on

!PRILûûûWITHûAûYIELDûTOûPUTûOFûû

which was higher than the 14.053% yield to put

offered by another Chinese developer JIAYUAN

INTERNATIONAL GROUP’s 12.00% US$225m two-

year non-put one bonds priced on October 12.

*IAYUANûISûRATEDû"ûANDûITSûNOTESû"ûBYû

Moody’s.

A similar structure with much higher

yields to put than yield to maturity have

been offered by Chinese high-yield issuers

to lure investors recently.

)NûADDITIONûTOû/CEANWIDEûANDû*IAYUANû

unrated HAINAN AIRLINES HOLDING on October

24 priced US$100m of 12.00% two-year non-

put one bonds with a yield to put of 14.216%.

Haitong International was the sole global

COORDINATORûSOLEûBOOKRUNNERûANDûSOLEûLEADû

manager on Oceanwide’s transaction.

Oceanwide Securities was co-manager.

Admiralty HarbourûGuotai Junan International

and Oceanwide Securities had been listed as

JOINTûGLOBALûCOORDINATORSûJOINTûBOOKRUNNERSû

and joint lead managers at the beginning of

MARKETINGûBUTûNOTûWHENûTHEûDEALûWASûPRICED

Oceanwide Holdings International

Development III is the issuer and the

Shenzhen-listed parent company is the PRC

parent guarantor. China Oceanwide Group

will be Hong Kong parent guarantor and

Oceanwide Real Estate International the

subsidiary guarantor.

4HEûBONDSûHAVEûANûEXPECTEDûRATINGûOFû"nû

from Fitch.

Rating agencies in late May downgraded

Oceanwide’s ratings and its bonds on its

HIGHûLEVERAGEûANDûSIGNIlCANTûUNCERTAINTIESû

OVERûRElNANCINGûITSûLARGEûOUTSTANDINGûDEBTû

maturities.

Fitch on May 28 downgraded Oceanwide’s

RATINGûANDûITSûSENIORûBONDSûRATINGSûTOû"nû

FROMû"û30ûONû-AYûûLOWEREDû/CEANWIDESû

RATINGûTOû###ûFROMû"nûANDûITSûSENIORûBONDSû

TOû###nûFROMû###

BLUESTAR PRINTS US$300m PERP

CHINA NATIONAL BLUESTAR (GROUP)ûRATEDû"AA

"""!nûHASûPRICEDû53MûOFûSENIORû

perpetual non-call securities after drawing

53MûOFûlNALûORDERSûFROMûûACCOUNTS

The 6.250% Reg S notes were priced at

ûTOûYIELDûûINSIDEûINITIALûû

area guidance.

)FûNOTûCALLEDûTHEûDISTRIBUTIONûRATEûOFûTHEû

notes would be reset to the initial spread of

BPûOVERûTHREE

YEARû4REASURIESûPLUSûAû

400bp step-up.

/FûTHEûNOTESûûWENTûTOû!SIAûANDûûTOû

%UROPEû"YûINVESTORûTYPEûûWENTûTOûFUNDû

MANAGERSûANDûASSETûMANAGERSûûTOûBANKSû

8% to private banks and 4% to insurance

companies.

4HEûCHEMICALûPRODUCERûWHICHûISû

owned by state-owned China National

#HEMICALû#ORPû#HEM#HINA    ûPLANSûTOûUSEû

THEûPROCEEDSûFORûDEBTûRElNANCINGûWORKINGû

capital and general corporate purposes.

"LUESTARû&INANCEû(OLDINGSûISûTHEûISSUERû

ANDû#HINAû.ATIONALû"LUESTARûISûTHEû

guarantor.

4HEûNOTESûHAVEûEXPECTEDûRATINGSûOFû"AA

"""û-OODYS&ITCH 

BNP ParibasûBOC InternationalûCredit

Agricole and Morgan Stanley were joint global

COORDINATORSûJOINTûLEADûMANAGERSûANDûJOINTû

bookrunners.

Moody’s on October 15 changed China

.ATIONALû"LUESTARSû"AAûRATINGûOUTLOOKûTOû

STABLEûFROMûNEGATIVEûCITINGûEXPECTATIONSû

THATûTHEûCOMPANYSûIMPROVEDûCREDITûPROlLEû

will be sustained over the next 12–18

months.

ALL INTL EMERGING MARKETS BONDS
BOOKRUNNERS: 1/1/2018 TO DATE

Asia-Pacific
Managing No of Total Share
bank or group issues US$(m) (%)

1 HSBC 195 20,237.80 8.1
2 Citigroup 109 14,589.01 5.8
3 Bank of China  134 11,833.26 4.7
4 Standard Chartered 116 10,946.65 4.4
5 Morgan Stanley 59 9,816.24 3.9
6 BNP Paribas 83 9,482.82 3.8
7 BAML 55 8,067.11 3.2
8 Goldman Sachs 44 7,635.51 3.0
9 Credit Suisse 53 7,206.32 2.9
10 UBS 78 7,040.65 2.8
Total 564 251,209.03
Excluding equity-related debt.
Source: Refinitiv SDC code: L4