Asia, Europe and the US on Monday for an
offering of US dollar bonds.
The Korean wireless telecoms operator
has mandated Bank of America Merrill Lynch,
BNP Paribas, Goldman Sachs, JP Morgan, Mizuho
Securities and Standard Chartered Bank.
A 144A/Reg S issue with intermediate
maturities may follow, subject to market
conditions.
SKT has US$700m of 5.5-year bonds due
on May 1.
TAIWAN
SYNDICATED LOANS
› CHIPMOS READIES FINANCING
CHIPMOS TECHNOLOGIES has launched a five-
year loan of NT$10bn (US$342m) through
mandated lead arranger and bookrunner
Taiwan Cooperative Bank.
The loan, split into a NT$7bn term loan
tranche A and a NT$3bn revolving credit
tranche B, pays respective interest margins
of 20bp and 22.5bp over the one-year
post office savings rate. There is a pre-tax
interest-rate floor set at 1.7%.
Banks can join as MLAs with NT$2bn
or more for an upfront fee of 18bp, or
as participants with NT$1.3bn–$1.9bn,
NT$700m–$1.2bn and NT$300m–$699m for
fees of 14bp, 8bp and 4bp, respectively. The
deadline for responses is April 27.
Funds are to refinance a NT$13.2bn five-
year loan from May 2016 and for working
capital.
Bank of Taiwan, Land Bank of Taiwan
and Taiwan Cooperative Bank were the
MLABs on the NT$13.2bn loan, with LBoT
as facility agent. That facility comprised
a NT$8.3bn term loan tranche A and a
NT$4.9bn-equivalent revolving credit
tranche B, which could be drawn in either
US or NT dollars.
The NT dollar portions for tranches A
and B offered margins of 46bp and 56bp
over the one-year POS rate, respectively.
There was also a pre-tax interest-rate floor
set at 1.7%. The margin on the US dollar
portion on tranche B was 135bp over three-
month or six-month Libor.
The Taiwan-listed borrower provides
semiconductor testing and assembly
services.› POWERCHIP SIGNS NT$25BN LOANPOWERCHIP TECHNOLOGY has signed a NT$25bn
five-year term loan, via original mandatedlead arrangers and bookrunners Chang Hwa
Commercial Bank and Land Bank of Taiwan.
DBS Bank, Hua Nan Commercial Bank, Mega
International Commercial Bank and Taiwan
Cooperative Bank came in to share the MLAB
title. Chang Hwa was the facility agent.
The loan, split into a NT$14.2bn tranche
A, a NT$4.3bn tranche B and a NT$6.5bn
tranche C, offers an interest margin
ranging from 82bp to 112bp over Taibor,
based on the borrower’s pre-tax net profit
margin, with a pre-tax interest rate floor
of 1.7%.
Banks were offered a top-level upfront
fee of 25bp. The loan was signed on March
14.
The borrower’s factory and machinery
serve as security.
Funds refinance a NT$13bn loan signed
last June, as well as help meet capital
expenditure and working capital needs.
The borrower provides wafer-foundry
services to semiconductor companies.
For full allocations, see http://www.ifrasia.com.EQUITY CAPITAL MARKETS
› SHIN KONG PLANS CAPITAL RAISINGSHIN KONG FINANCIAL has announced a long-
term capital raising plan, involving eitherDemand cools for Shinhan T2 offering
Bonds High-grade borrower meets with tepid reception in soft marketSouth Korea’s SHINHAN BANK (Aa3/A+/A)
attracted a modest order book in a soft market
for a US$400m offering of Tier 2 bonds.
The Reg S notes, priced on Monday
at Treasuries plus 165bp, drew orders of
US$700m from 50 accounts. That was smaller
than the US$1.1bn for its US$350m T2s last
September, issued in a 144A/Reg S format.
On the latest issue, Asia accounted for
82% of the book, and Europe for the rest. In
terms of investor types, 64% were funds and
asset managers, 16% were banks and private
banks, while 20% were insurers.
Feedback from investors was that they
preferred the issue size to be capped at
US$400m. Shinhan had announced plans
to raise up to US$500m, according to an
exchange filing.
Shinhan paid a new-issue premium of
around 10bp–12bp over its US$350m T2 10-
year 2027s, which were spotted at around
G+147bp, while curve adjustment for another
year put fair value at about 155bp.
The outcome shows that even price-sensitive issuers, such as Korean borrowers,
are paying higher premiums for investor
demand in volatile credit markets.
“Overall, the reception wasn’t the
strongest, but the quality of the book was
quite high,” said a debt syndicate banker on
the issue, pointing out the top half featured
long-only global asset managers, life insurers
and bank treasuries.
“Given how soft this market was, I was
surprised that we were able to tighten that
much, but it’s turning into an investor’s
market. Headline book sizes aren’t massive,
and it’s less impactful on execution.”
The 10-year bullet was tightened 15bp
inside initial price guidance. Shinhan
tightened pricing more than Australian
peer Macquarie Group, which was unable to
narrow guidance on a US$500m 11-year non-
call 10 bond on the same day of marketing.
The bonds were spotted 2bp wider in the
aftermarket.
The Reg S offering is the first T2 print in
the G3 markets year to date. Despite weakmarket conditions, bankers said demand for
bank capital remained robust at the right
price.
“Investors are still looking for higher yields
from strong high-grade names in places like
Australia and Korea,” said another banker on
the deal.
The T2s have initial ratings of Baa1/BBB+
(Moody’s/S&P). The bonds will be written off
if the bank is declared insolvent.
S&P said Korean banks were likely to
receive extraordinary support from the
government in a preemptive manner and at
a relatively early stage. Such government
support would not constitute a nonviability
event in the country.
Shinhan’s Basel III-compliant CET1 and
capital adequacy ratios stood at 12.7% and
15.4%, respectively, at the end of last year,
according to its website.
Bank of America Merrill Lynch, BNP Paribas,
Commerzbank, Credit Suisse, HSBC and
Mizuho were joint bookrunners.
FRANCES YOON