Which of these five banks should win the Best debt adviser award?

The nominees, Bank of China, Citi, DBS, HSBC and Standard Chartered, each manifested their capabilities in a very competitive environment

THE ability of a financial institution to offer its clients a full suite of debt solutions to fund their growth plans underpins the strength of the nominees for Best debt adviser in The Asset Triple A Regional House and Deal Awards 2018.

Five banks are in the running for the accolade – Bank of China, Citi, DBS, HSBC and Standard Chartered – and each one of them has manifested their capabilities in a very competitive environment. Bank of China (BoC) was involved in several significant US dollar and euro-denominated bond deals for Chinese issuers in a global coordinator’s role, such as in the US$5 billion offering by the State Grid Corporation of China and in the 800-million-euro (US$988 million) issuance for Bright Food. It is capable of arranging green bond transactions in both renminbi and US dollar, and it is a leading arranger in China’s onshore bond market, including Panda bonds and asset-backed securities (ABS).

BoC also led the competition in the loan syndication market in non-Japan Asia. According to Thomson Reuters, the bank has a market share of 15.21% as a mandated arranger in 2017 and 19.52% as a bookrunner – way ahead of the other banks in both roles.

Citi has demonstrated its ability to tap new pockets of liquidity and non-bank investor bases in 2017. It coordinated multiple deals, such as the take-private transaction for Global Logistic Properties, which represented the largest-ever private equity buyout of an Asian company and the largest-ever M&A in Singapore. It worked on a number of acquisition financings for Chinese state-owned enterprises such as Beijing Gas and China Southern Power Grid.

The bank has arranged several innovative G3 bond deals, including the first bridge to high yield transaction for Indika Energy amounting to US$565 million, the first project bond in Asia since 1997 for Paiton Energy amounting to US$2 billion, and in Asia’s first indirect “trust preferred” issuance structure for Lenovo amounting to US$2 billion. It is also active in arranging onshore financing, such as the first-ever local Philippine peso financing for Home Credit Philippines.

Singapore lender DBS reminds the competition that regional banks are a force to reckon with in the highly competitive debt capital markets. It has a comprehensive coverage of the G3 bond market, participating in such landmark deals as Paiton Energy and in the largest-ever additional tier 1 capital issuance from a Chinese commercial bank and the largest-ever single tranche Asian US dollar offering to date for Postal Savings Bank of China (PSBC) amounting to US$7.25 billion.

The bank boasts of a strong loan franchise with the capability to lead acquisition financing transactions, such as in the US$1.25 billion secured amortizing term loan facility for Star Energy Geothermal to fund its purchase of Chevron’s geothermal assets in Indonesia. It has the ability to arrange local currency bond and loan deals in Hong Kong dollar and renminbi, in addition to Singapore dollar. It also provides reliable credit rating advisory services for clients to assist them in obtaining a fair credit rating.

HSBC once again manifested the breadth and depth of its debt solutions in 2017. As in the previous years, it led the competition in arranging G3 bonds in Asia, outside of Japan and Australia, with a volume of US$27.05 billion from 210 deals for a market share of 8.1%, according to Thomson Reuters. It led 17 of the 20 largest offshore deals from China, each in a size of at least US$2 billion equivalent. It also maintained its leadership position in Asian local currency bonds, delivering high-profile transactions across a wide range of markets in the region.

HSBC is a leading foreign bank in onshore China auto loan ABS market, acting as joint lead underwriter in at least five transactions. These include the four-billion-yuan (US$632 million) deal for Ford Automotive Finance (China), which was the first Bond Connect-eligible ABS deal in the China interbank bond market (CIBM) and successfully brought in several Bond Connect investors in the final book. The bank also led several key large loan syndication transactions in 2017, including the US$1.75 billion term loan facilities for Reliance Industries, and in sponsor-related financing such as the HK$2.8 billion (US$359 million) senior credit facilities to support Permira’s acquisition of Tricor.

Standard Chartered is likewise a strong contender for the award, having a well-entrenched franchise in both G3 and Asian local currency bonds. It assisted in bank capital deals such as in the PSBC US$7.25 billion AT1 deal, and across the credit spectrum, such as in the high yield and investment grade space. The bank helped introduce innovation in the market with the first zero subordinated perpetual structure for FWD Group amounting to US$500 million. It was a new template for the hybrid market that can be accessed by corporate and select insurers alike.

One of Standard Chartered’s defining deals in the Asian local currency bond market was the 16-billion-yuan bond for Agricultural Development Bank of China, which represented the first bond offering toward both domestic and foreign investors under the Bond Connect scheme. In the leveraged finance/structured finance market, it helped arrange an innovative acquisition facility of up to US$394.3 million for analytics services provider Mu Sigma.

The bank is a driving force in China’s securitization market among the foreign banks, arranging the first-ever cross-border securitization transaction under China’s regulatory framework. The China Opportunity International transaction was the first of its kind where international investors can have direct access to US dollar bonds with credit exposure linked to respective renminbi-denominated Chinese local government and Ministry of Finance bonds without undergoing any currency swap arrangement.

The winner of the Best debt adviser will be announced during The Asset Regional House and Deal Awards dinner on February 1 at the Four Seasons Hotel, Hong Kong. Please click here for more details.