Which bank’s bond advisory is best in bonanza year for Asia G3 bonds?

Five banks – Bank of China, Citi, Deutsche Bank, HSBC and Standard Chartered – are nominated as Best bond adviser in The Asset Triple A Regional House and Deal Awards

THE Asia G3 bond market continued to provide large slice of capital solutions to issuers and borrowers across the region in 2017, leading to another record volume of issuance for the second consecutive year. According to Thomson Reuters’ figures, the total volume for the whole of 2017 amounted to over US$334.41 billion, up 52.8% from US$218.84 billion in the previous year.

Several banks distinguished themselves during the year as they were able to capture the thematic trends in the market, such as green bonds and corporate hybrid offerings. They brought several first-time issuers into the market and tapped into different pools of liquidity. The market also witnessed innovative structures that contributed to the further development of the capital markets in the region.

For their achievements in 2017, five banks – Bank of China, Citi, Deutsche Bank, HSBC and Standard Chartered – are nominated as Best bond adviser in The Asset Triple A Regional House and Deal Awards.

Bank of China demonstrated the strength of its distribution to Chinese investors who anchor the execution of the transactions. It brought several new Chinese issuers into the US dollar bond market, such China Reinsurance Group, while helping other issuers access other pools of liquidity such as Bright Food and Export-Import Bank of China, which raised funding in the euro bond market.

The bank’s other significant transactions in 2017 include the largest US dollar bond issuance by a Chinese state-owned enterprise for State Grid Corporation of China (US$5 billion), the first US dollar bond issue in Ningxia province for Yingchuan Tonglian Capital Investment Operations Company (US$300 million) and the first Chinese port group issuer for Lianyungang Port Group Company (US$30 million).

Citi also demonstrated the strength of its G3 bond franchise in 2017 as it helped brought several first-time issuers into the market, including Press Metal Aluminium Holdings from Malaysia, Kyobo Life Insurance Company from South Korea, HPCL-Mittal Energy from India and Beijing Gas Group Company from China. It executed innovative transactions such as the first bridge-to-high yield deal for Indika Energy, the first US dollar project bond in Asia since 1997 for Paiton Energy and Asia’s first indirect “trust preferred” issuance for Lenovo.

The bank likewise led the sovereign deals for the Ministry of Finance of China, Indonesia, Pakistan, the Philippines, Sri Lanka and South Korea, and participated in a number of offshore mega deals including the blockbuster US$7 billion deal for Alibaba Group Holding and State Grid Corporation of China.

Deutsche Bank has a diversified sector coverage in the Asia G3 bond market, including gaming, enabling the bank to arrange the largest high yield offering ever in North Asia at US$1.35 billion for Wynn Macau. Such a strong focus on high yield also saw Deutsche Bank executing the first US dollar high yield rated corporate issuance out of Malaysia over the past decade for Press Metal Aluminium and the debut deal for Geo Energy Resources.

The bank likewise arranged one of the largest high yield exchanges and new issue offerings in Asia ever at US$3.45 billion for Kaisa Group Holdings. Like the competition, it executed sovereign deals for China, Indonesia, Pakistan, the Philippines and Sri Lanka.

HSBC led the other banks in issuance volume in 2017, according to Thomson Reuters, with a league-leading tally of US$27.05 billion from 210 transactions. It was involved in several offshore mega deals from China, including the largest offering in 2017 for Postal Savings Bank of China (PSBC) at US$7.25 billion as it raised additional tier 1 capital. However, it missed the US$7 billion offering for Alibaba Group Holding.

The bank was likewise involved in several sovereign bond deals, including for China, Indonesia, Sri Lanka and South Korea. It arranged 26 G3 corporate hybrid transactions, including eight fixed-for-life perpetual offerings such as for Ayala Corporation, CK Infrastructure Holdings and Sun Hung Kai Properties.

HSBC is also a leader in sustainable financing through a number of inaugural green bond issuances from across the region, such as those for DBS and Korea Development Bank. It was a joint green structuring adviser for the ICBC (Luxembourg) US$2.15 billion green bond – the first one issued by a Chinese financial institution in alignment with both ICMA green bond principles and PBoC green bond categories.

Standard Chartered is also strong in the sovereign space with deals for China, Indonesia, Pakistan, the Philippines and Sri Lanka. It arranged the first zero coupon subordinated perpetual structure launched in the market for FWD Group amounting to US$500 million.

The bank was involved in the PSBC AT1 deal and in the US$3.4 billion equivalent offering for China Huarong Asset Management Company, which represented the first US dollar floating rate note ever issued by a Chinese asset management company and the first 30-year US dollar senior notes deal arranged for a Chinese non-bank financial institution.

Standard Chartered also boasts of a strong high yield bond franchise with an inaugural deal for Shandong Ruyi Technology Group Company for US$250 million, marking the lowest-ever rated debut issuance, as well as deals for Shui On Land (US$600 million) and Vedanta Resources (US$1 billion, including any-and-all tender offer for its 2018 and 2019 bonds).

The winner of the Triple A Best bond adviser Award will be revealed on February 1 2018 during The Asset Regional House and Deal Awards dinner. For more information about the awards ceremony please click here.