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Bonds, loans and ECM all up in first half 2014

Asia pacific
By GlobalCapital
03 Jul 2014

There were big increases in overall volume for Asia Pacific ex-Japan bonds, loans and equity in the first six months of 2014, with bonds and loans posting their biggest ever first half results. DCM rose by 9% from the same period in 2013, to $576bn, while loans jumped 16% to $243bn. ECM volumes were up 15% to $107bn, the highest level since the first half of 2011.

In DCM, the second quarter also set a record, with volume up 32% to $330bn, from $250bn in 2013. The region saw its highest share of global H1 DCM volume on record, accounting for 17% of the total.

International G3 DCM volumes in the region stood at $112.3bn, up 22% on the same period in 2013 ($92.4bn) — and also the highest half year volume on record.

China Development Bank Corp topped the league tables for overall Asia Pacific (ex Japan) DCM, with 142 deals and an apportioned value of $25.5bn. Citi came second with 119 deals and credit of $23.4bn. HSBC was third with $23bn, although it completed far more deals than any other firm, with 193.

That dealflow helped drive HSBC to the top of the International G3 rankings, with 95 deals and credit of $14.4bn. Citi finished in second place, with $12.4bn from 72 deals, while JP Morgan was third.

HK dollar loans shine

Syndicated loan volume for the entire Asia Pacific region, including Japan, actually fell by 1% year on year, to $374.7bn. But stripping out Japan saw an increase of 16% to $242.7bn, with borrowings in Hong Kong dollars showing one of the best pick-ups since 2010.

Deals in the currency accounted for 10% of the overall volume in the region during the first six months, according to Dealogic. And although just a small portion of the total, that volume has risen by an astounding 89% year on year, giving it the highest half year share of regional volumes since 2010.

The figures also show that the battle between syndications and club deals is continuing, especially as many of the deals done out of Hong Kong go the club route. Clubs reached $101.3bn in H1, the highest half year volume on record.

But acquisition financings have taken a hit. In the second quarter, volumes slumped by 56% to $8.5bn — despite chunky deals by issuers such as Oversea-Chinese Banking Corp, which took a HK$38.4bn ($4.95bn) bridge loan in April to fund its purchase of Wing Hang Bank.

There was also a lot of shuffling at the top of the G3 currency loan bookrunner rankings. State Bank of India finished first, up from fifth place during the same period last year, followed by Standard Chartered, which had been third in H1 2013. Australia and New Zealand Bank slipped one place to come third this time around.

Tech leads ECM

The first six months of the year saw technology firms lead the way in the Asia Pacific ex-Japan ECM volume rankings, raising $20bn via 181 deals — a record high for the sector in both volume of proceeds and number of deals.

The top contributor was Chinese computer parts manufacturer BOE Technology Group’s $7.4bn follow-on on April 4, the largest tech ECM offering globally since Facebook’s $16bn debut in May 2012.

Total ECM volume in the region stood at $106.5bn, up 15% from the same period last year, and the highest H1 figure since 2011. Issuers from China accounted for more than half (53%), followed by Australia (15%) and Hong Kong (7%).

While momentum was clearly with north Asia in H1 2014, the same could not be said for southeast Asia and India, which recorded their slowest first six months since 2009, with volumes of $9.3bn and $6.3bn, respectively. Malaysia was one of the few countries outside north Asia to see an increase, up 66% to $3.7bn.

The bookrunner rankings look fairly traditional, with Goldman Sachs ranking top by volume with $9.35bn (from 48 trades) and UBS leading the number of deals, with 63 (for volume of $6.39bn). A notable performance came from Citi, which ended up third by volume with $5.85bn from just 33 deals.

By GlobalCapital
03 Jul 2014