S$1.4bn from over 89 accounts. Private
banks took the largest chunk of the deal
at 70%, with fund managers and insurance
companies taking 27%, leaving banks with
3%. Geographically, Singapore and Malaysia
accounted for 91%, Hong Kong and Taiwan
7% and EMEA 2%.
Credit analysts had put fair value of the
new bonds at 4.9%, after adjusting for the
one-year extension to call date. The new
HSBC bonds were trading in the range of
100.10 the following morning.
This is HSBC’s first AT1 deal since March
when it sold a US$4bn dual-tranche AT1
note.
HSBC undertook a US$2bn share buyback
programme in May, which together with
dividend payments and foreign exchange
differences, resulted in a lower common
equity Tier 1 ratio to 14.2% as end-June,
compared with 14.5% at end-March. The
additional capital from the new issue will
boost HSBC’s focus on potential growth
opportunities to improve returns, says
Wong, who adds that share buybacks are
unlikely to continue.
The perpetual subordinated contingent
convertible notes, expected to be rated
Baa3/BBB (Moody’s/Fitch), will settle on
September 24. There is a reset to the
original spread of 266.5bp over SOR every
five years if the notes are not called. The
notes will convert to equity if the common
equity Tier 1 ratio of HSBC Group drops
below 7.0%.
HSBC was sole structurer and
bookrunner. DBS and UOB were joint lead
managers. ICBC Singapore and Maybank were
co-managers.› SOILBUILD REIT GOES PERPETUALSOILBUILD BUSINESS SPACE REIT has sold S$65m of
perpetual non-call three subordinated notes
priced at par to yield 6%.
The corporate perpetual issue, the first
since March when ARA Asset Management
issued S$300m of perpNC5 at 5.65%, is the
sixth such transaction this year.
Proceeds will be used for general
corporate purposes, including partial
funding of recent acquisitions made in
Australia. The Singapore-listed real estate
trust is buying two Australian properties for
A$116.25m, which it said would be funded
with a combination of senior debt and
perpetual.
The trust disclosed that major
shareholder Lim Chap Huat, who also owns
parent Soilbuild Group, will be allocatedS$30m of the notes.
The perps will reset at year three to the
prevailing three-year Singapore SOR plus
the initial credit spread of 370bp. There is
no step-up margin and no change of control
fee.
Settlement is on September 27. HSBC was
sole lead manager.RESTRUCTURING
› ASL MARINE CAUTIONS ON REPAYMENTASL MARINE HOLDINGS last week warned that
it may not be able to meet repayment
obligations on its S$502.12m debt unless
creditors agree to restructure the loans and
bonds again.
It plans to ask holders of S$142.5m of
bonds to extend maturities, lower the
amortised amount of principal repayment,
reduce coupons and relax certain
covenants. Banks which are owed S$359.6m
may be asked to re-profile loans to match
the company’s operating cashflows, extend
a S$150m working capital line, reduce
interest rates and relax certain covenants.
ASL Marine’s warning came at an
informal meeting held on SeptemberMercuria financing in general syndication
Loans Commodity trader returns for refi and A&EMERCURIA ENERGY TRADING has launched its
US$1bn financing into general syndication.
ANZ, Bank of China Singapore, Rabobank
Singapore, DBS Bank, Emirates NBD Capital,
Industrial and Commercial Bank of China
London, ING Bank Singapore, Mizuho Bank,
MUFG, OCBC, Societe Generale and Sumitomo
Mitsui Banking Corp Singapore are the
bookrunning mandated lead arrangers of
the borrowing, which carries an unspecified
greenshoe option.
Mercuria Energy Trading and Mercuria
Asia Group Holdings are the borrowers of
the deal, which comprises a US$500m one-
year multi-currency revolving credit portion
(Facility A), a US$200m one-year revolver
and swingline facility (Facility B), and a
US$300m three-year revolver (Facility C).
Mercuria Energy Group, the ultimate
holding company of the borrowers, is
providing irrevocable and unconditional
guarantees.
Facility A pays an interest margin of 65bp
over Libor, while facility B pays 65bp for the
revolver and 110bp for the swingline option.
Facility C pays a margin of 125bp.Banks can participate in either one or a
combination of Facility A, B and C. Lenders
receive the MLA title for an aggregate
commitment amount of US$50m or more,
lead arranger title for tickets of US$30m–
$49m, arranger title for US$20m–$29m, and
co-arranger title for US$10m–$19m.
Lenders looking to join as MLAs are
required to commit a minimum of US$10m
to Facility B. Those committing to Facility
B must be able to provide swingline loans.
Banks participating in Facility A may choose
to lend only in US dollars, or in that currency
and renminbi.
For Facility C, it pays a utilisation fee of
10bp for drawings of between 0% and 33%;
20bp for between 33% and 66%; and 40bp
for drawings higher than 66%.
The deadline for commitments is the
end of October. One-on-one meetings
are scheduled to take place in the Middle
East on September 19, followed by bank
presentations in Shanghai on September 20
and Singapore on September 21.
Proceeds will be used to refinance
a US$780m syndicated revolver fromNovember 2017, and amend and extend
a US$260m Facility C of a US$925m
syndicated revolver from November 2016.
Excess funds will be used for general
corporate purposes and working capital
requirements as well.
Mercuria last tapped the Asian loan
markets in November for a US$1bn multi-
tranche financing that attracted 18 lenders in
general syndication.
Mercuria Energy Trading and Mercuria
Asia Group Holdings were the borrowers
on that financing, which comprised a
US$548.5m one-year multi-currency
revolving credit facility A, a US$191.5m
one-year revolving credit and swingline
facility B, and an amended and extended
US$260m three-year revolving credit
facility C. The US$548.5m facility A had a
renminbi portion of US$210.8m-equivalent.
Facilities A and B (revolver option) offered
a top-level all-in pricing of 110bp, while
the swingline option paid 150bp based on
interest margins of 70bp and 110bp over
Libor respectively.
CHIEN MI WONG