GlobalCapital Asia awards 2020: Loans
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GlobalCapital Asia awards 2020: Loans


GlobalCapital Asia has spent the last two months talking to banks and their clients to determine the most impressive capital markets transactions and advisers across Asia ex-Japan in 2020, a volatile and unpredictable year. We are pleased to begin our awards announcements in the loan market.

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Airport Authority Hong Kong’s HK$35bn ($4.5bn) dual-tranche loan

HK$17.5bn five year term loan and HK$17.5bn five year revolver

Mandated lead arranger, bookrunner and general adviser: China Development Bank Hong Kong branch

Mandated lead arrangers, bookrunners and coordinators: ANZ, Bank of China, HSBC, Standard Chartered and Sumitomo Mitsui Banking Corp

Mandated lead arrangers and bookrunners: Bank of Communications Hong Kong branch and Industrial and Commercial Bank of China (Asia)

Mandated lead arrangers: Agricultural Bank of China Hong Kong branch and Citi

Lead arrangers: Bank of Nova Scotia, Chiyu Banking Corp, China Everbright Bank Hong Kong branch, CMB Wing Lung Bank, Crédit Agricole, Dah Sing Bank, DBS Bank, Hang Seng Bank, Mizuho Bank, Oversea-Chinese Banking Corp and Shanghai Commercial Bank

Airport Authority Hong Kong (AAHK) is a borrower that can typically tap bank liquidity easily when market conditions are strong, helped by the government’s 100% ownership. It proved this year that it enjoys the same support during difficult periods, sealing a jumbo loan at a time when Covid-19 brought the travel industry to its knees.   

The government body became the first borrower from Hong Kong to tap the loan market after Covid-19 hit the territory. Hong Kong saw a big wave of infections in March, forcing the government to introduce strict border controls, banning all non-residents from entering the city and all residents making their way back to undergo a mandatory 14-day quarantine.  

This unsurprisingly took a toll on the travel sector, and on AAHK’s business.

AAHK only handled 576,000 passengers and 12,115 flights in March, representing year-on-year drops of 91% and 67%, respectively. Cargo throughput also slumped 12.4% year-on-year. That meant that when the firm wanted to venture out for a syndicated loan to finance its capital expenditure to build a new runway project, there was plenty of uncertainty around which banks would still want to support the credit.

The borrower started by bringing in China Development Bank as a general adviser. It decided to target Mainland Chinese lenders during syndication, believing that international banks would struggle to join.

AAHK’s sector was not the only challenge. The loan’s pricing and use of proceeds also created headaches. The fact the money will go partly towards runway construction rather than for refinancing was a concern among some banks, as was the tight all-in pricing of 82bp over Hibor.

These concerns were dealt with admirably thanks to the leads’ targeted approach to syndication.  

The mega deal was oversubscribed, and increased from the initial HK$20bn size to HK$35bn, making it the largest loan syndication in the city this year. A total of 21 local and international banks were part of the syndicate group, reflecting their confidence in the AAHK credit.

The deal also included an innovative feature. It was the first corporate syndicated loan in Hong Kong that was compliant with the Equator Principles, a framework to determine and manage environmental and social risks in projects, ticking the ESG box for lenders and the borrower.

For all these reasons, AAHK’s deal is a deserving winner of the best investment grade loan of the year.


Trans Retail Indonesia’s $740m-equivelent dual-currency loan

€593m five year and $90m five year tranches

Mandated lead arrangers and bookrunners: Bank BTPN, BNP Paribas, CTBC Bank, DBS, Deutsche Bank Singapore branch, First Abu Dhabi Bank Singapore branch, Maybank, Rabobank Singapore branch, Standard Chartered, Sumitomo Mitsui Banking Corp Singapore branch and Taishin International Bank Singapore branch

Mandated lead arrangers: Mega International Commercial Bank’s offshore banking unit (OBU) and Shanghai Pudong Development Bank Singapore branch

Lead arrangers: Bank of East Asia Singapore branch and China Minsheng Banking Corp Hong Kong branch

Arrangers: Bank SinoPac, Cathay United Bank Labuan branch, Chang Hwa Bank OBU, Hua Nan Commercial Bank OBU and Singapore branch, KEB Hana Bank Singapore branch, Land Bank of Taiwan Singapore branch, Taichung Commercial Bank Co Labuan branch, Taiwan Business Bank OBU, Taiwan Cooperative Bank OBU and Yuanta Commercial Bank

Lead managers: Bank of Kaohsiung OBU, Bank of Panhsin, China Citic Bank International Singapore branch and First Commercial Bank OBU

Few industries were hit harder by Covid-19 than retail. Brick-and-mortar stores took the brunt of the damage, including Trans Retail Indonesia, which runs grocery stores and hypermarkets, the latter through its ownership of Carrefour in the southeast Asian country.

That means that when Trans Retail wanted to meet some of its refinancing needs with a new loan, a comprehensive funding solution needed to be put in place, given the pressure the borrower was facing, and banks caution around the retail sector.

The lead banks on the transaction had to think on their feet on more than one occasion when executing Trans Retail’s deal.

First was timing. The loan was launched into syndication in February, shortly after Covid-19 broke out. The lead banks adjusted quickly — arranging a webinar for potential participants as physical roadshows were not possible.

They also decided to target two different currencies as a way to hedge against any liquidity issues and snag decent pricing for Trans Retail. The firm opted for euros and dollars, with the euro tranche becoming the largest facility in the currency raised by an Indonesian corporation to date.

The approach proved beneficial for the borrower, given many banks faced a rise in their dollar funding costs at the start of the year. The dollar tranche was not syndicated, with the leads only taking commitments for the chunkier euro portion. This meant among the 10 mandated lead arrangers and bookrunners, two banks provided the dollar funding, while the remaining firms all committed in euros.

By raising a euro tranche, the company managed to cut the margin for its loan return. It offered a margin of 275bp over Euribor, while its last five year loan in 2017 denominated in dollars paid a 350bp base margin.

The bookrunners also decided on a two-phase close of syndication, given longer internal approval timelines to banks due to the pandemic.

That wasn’t all. An unusual structure of the deal was a staggered fee arrangement. For example, for the top level, a 90bp fee was paid to lenders at the close of the deal while another 25bp will be paid 15 months after the drawdown. This structure offered the borrower some flexibility, as it was also open to tapping the bond market for some of its financing requirements. Had the company sealed a bond, it wouldn’t have had to pay the additional 25bp fee on the loan.

Although a bond never materialised in the end, the staggered fee structure helped Trans Retail avoid a lumpsum payment in the beginning.

Thanks to these efforts, the loan was a big success, with Trans Retail sealing Indonesia’s largest corporate loan from the private sector during the coronavirus crisis, making it GlobalCapital Asia’s pick for the best high yield loan of 2020.

Nine existing lenders dropped out of the loan, including Industrial and Commercial Bank of China and Bank of China, which together held 26.7% of the loan being refinancing. But despite a big chunk of existing liquidity gone for the new transaction, the leads brought in seven new banks to make up for the shortfall. Taishin International Commercial Bank also stepped up to take the MLAB role this time around, having previously been a participant.



$600m dual-tranche loan for Hexaware Technologies’ take-private by Baring Private Equity Asia

$383m five year tranche for refinancing and $217m five year tranche for privatisation

Original mandated lead arrangers and bookrunners: ANZ, Barclays, BNP Paribas, Citi Hong Kong branch, Crédit Agricole, DBS, Deutsche Bank Singapore branch, HSBC and Standard Chartered (Singapore)

Mandated lead arrangers and bookrunners: Bank SinoPac, E. Sun Commercial Bank, Korea Investment and Securities, and Sumitomo Mitsui Banking Corp Singapore branch

Mandated lead arrangers: Korea Development Bank Asia and KDB Singapore branch

Lead arranger: MUFG Bank

Arrangers: Far Eastern International Bank, Taipei Fubon Bank, Taishin International Bank and Woori Bank Hong Kong and Singapore branches

Hexaware Technologies, an Indian software firm, started 2020 on shaky ground after being hit by a downgrade by Moody’s in April. Hexaware had a $385m 7% senior bond due in July 2021, and the ratings agency pushed the company and its bond to B1 from Ba3 citing refinancing risks.

The company’s bonds tumbled in secondary trading as a result. Investors raised questions over shareholder Baring Private Equity Asia’s resolve to stand behind the asset. India was hit by a raft of Covid-19 cases, triggering a national lockdown in March and April. Hexaware considered testing bond market appetite for a new deal, but ended up holding off given the volatility.

This meant the loan market offered a natural alternative avenue to raise funds. But when Barings announced plans in June to delist Hexaware from the Indian stock exchange, a creative solution was needed to meet both Hexaware’s refinancing needs and funding the take private.

The result was a dual-tranche loan, split between a $383m tranche for refinancing and a $217m portion for privatisation. This meant that even if the take-private ended up being scuppered, Hexaware would still be able to draw down on the refinancing portion.

A large bookrunner group of nine banks supported the deal, willing to take underwriting risk and syndicate the transaction during a volatile period for markets. Many banks were understandably on the fence when it came to lending to India, citing uncertainty around the control of the virus and the toll on economic growth. This was despite the deal offering rare exposure to a leveraged buyout loan in India.

A senior stage was arranged first for de-risking the leads. Four banks joined ahead of a launch into general syndication.

The two-pronged approach helped, given the host of questions the bookrunners and the borrower had to tackle from participating banks. First was about Hexaware’s business model, given about 10% of its revenues come from the travel sector, an industry under trouble due to travel curbs. But the firm was able to demonstrate the importance of its IT operations, and the growing need of its data privacy services, minimising banks’ concerns.

The fact the loan was raised at the holding level by HT Global IT Solutions Holdings, an investment vehicle of Barings, also added to lenders’ concerns.

However, with the lead banks’ accurate read of the market, and the right structure, pricing and syndication strategy, the loan received a strong response during syndication and ended up oversubscribed. 

Barings had also been supportive during the process. The PE firm showed its confidence in Hexaware’s business by boosting the price of the privatisation offer to Rp475 per share from Rp285 to ensure the success of the privatisation. As a result, Barings’ open offer sailed through without hitches — a rare outcome in India’s buyout market.

In a year riddled with volatility, falling volumes and deals put on hold, Hexaware’s take-private success shone a light on the loan market’s resilience during turbulent times, and how a well-structured transaction can find more than enough bank support. This makes the deal not only GlobalCapital Asia’s best leveraged and acquisition loan, but also 2020’s best loan.



Bank lenders in Asia started 2020 on a promising note, having built a strong pipeline of transactions last year. But when Covid-19 hit, everything changed. This was most noticeable in social interactions and the way people worked, but the pandemic inevitably dented both borrowing and lending appetite.

Loan volumes in Asia ex-Japan ex-onshore China tumbled 25% during the awards period to $260bn, according to Dealogic data. Funding costs temporarily rose at retail banks, and lenders struggled to do the right amount of due diligence and organize site visits amid travel bans.   

HSBC stood out for adapting its business rapidly to the challenging backdrop and being the bank of choice for clients in need of financing solutions.

While many banks were reluctant to take underwriting risk this year, HSBC increased its underwriting commitment for the third consecutive year, closing three times more underwritten deals compared to 2018. 

Under the leadership of James Horsburgh, head of leveraged and acquisition finance for Asia Pacific, and Ashish Sharma, head of loan syndications for the region, HSBC took a straightforward approach to its business: leveraging its strong commercial banking client base for opportunities, banking mainly with existing clients but ensuring – thanks to the bank’s sheer size – that it still had a diverse roster of customers.

HSBC maintained its strong presence in Greater China but also grew its business across Asia. It closed deals from 16 countries during GlobalCapital Asia’s awards period, and shifted from an investment grade-focused bank to a higher value transaction-focused lender.

Some standout examples include working as a mandated lead arranger and bookrunner on debut borrower Chinese internet company Lufax’s $1.29bn syndication at the start of the year, and being the sole underwriter on Malaysian firm Serba Dinamik’s MR1.2bn transaction, the first fully-underwritten Islamic financing loan in southeast Asia.

Close collaboration

HSBC took a proactive approach to dealing with the coronavirus crisis, putting two origination bankers in Beijing and Shanghai in June when travelling to China reopened. This was with the aim of maintaining key relationships with the bank’s mid-market commercial banking clients.

Sharma and Horsburgh also held daily calls within their team to keep abreast of any developments with clients and the market.

More importantly, the bank’s syndication and origination teams worked more closely this year than in the past in a bid to offer the right kind of advice to clients. This meant the sales team started to get involved in a deal at an earlier stage, which in turn meant term sheets were finalised earlier, allowing salespeople to better understand the credit, the key issues and risk, enabling them to tackle questions from participating banks more effectively.

A long-running consolidation of its staff, plus additional hires, also played a role in HSBC’s success this year.

One new appointment was of former ING banker Eddie Wong in November 2019, hired to focus on event-driven transactions. Samuel Teh, meanwhile, moved to HSBC’s loan syndication team in August from BNP Paribas, with a focus on real estate and infrastructure assets. Adam Wotton joined HSBC’s leveraged and acquisition finance team in June 2019 from Rabobank, giving the team further momentum.

Leveraged finance has been a focus for HSBC in 2020, despite limited deal flow due to the pandemic. HSBC managed to bag a role in Indian company Hexaware’s take-private by Baring Private Equity Asia, GlobalCapital Asia’s deal of the year, and helped Hong Kong company Vistra, also backed by Barings, execute an amendment, extension and upsize of a term loan B and revolver.

HSBC ramped up its private loans business too, helping commercial banking clients unable to access the bank loan market raise funds from investors. The bank ran six such deals this year, versus just two in 2019.

One of the challenges all origination banks faced was sourcing enough liquidity for their clients at a time when retail banks were more risk averse.

HSBC quickly changed its distribution strategy after seeing banks focusing more on lending to borrowers from their own countries. For example, for a Chinese borrower, instead of targeting Taiwanese banks as in the past, HSBC approached different branches of Chinese banks for incremental liquidity.

Its efforts are also reflected in its league table standing.

HSBC took the second spot after China Construction Bank on the Asia ex-Japan ex-onshore China loans bookrunner league table during the awards period, with credits for $2.5bn and a 10.98% market share, shows Dealogic. In comparison for the same awards period last year, it had a bigger market share of 12.55% and credits worth $4.7bn.

For adapting to the difficult circumstances quickly and showing its resilience, HSBC is GlobalCapital Asia’s loans house for 2020.

BNP Paribas shines

We would also like to take this opportunity to recognise another bank that had an exceptional year in the loan market. BNP Paribas showed strong judgement and a good read of market conditions to grow its loans business significantly in 2020.  

Its presence was particularly visible in the acquisition and leveraged finance market, given it worked on two key transactions, Hexaware’s and Shanghai Electric Group’s take-private loans.

The fact that the bank’s credit committee sits in Asia rather than in Europe helped BNP Paribas be nimbler with its decision making. For example, for Charoen Pokphand Group’s Tesco Asia acquisition loan, BNP Paribas was initially part of a bank group supporting competing bidder TCC Group. But when CP Group emerged victorious, the French lender managed to obtain internal approvals rapidly to switch to CP Group’s transaction, putting a chunky commitment of $1bn in April, at the height of Covid-driven market volatility.

The bank’s approach was both strategic and opportunistic. Its focus was on core clients where it was ready to commit to deals, but still took a disciplined approach to its final hold positions.

From an opportunistic point of view, it set up a team dedicated to private equity business after seeing more possibilities emerging from the industry. It also established a three people team to focus on renewable financing.

When it comes to sourcing liquidity, the bank’s joint venture between the capital markets and global markets teams helped it find investors when bank liquidity was inaccessible, allowing it to distribute deals widely. Thanks to that, BNP Paribas, whose loan capital markets team in Asia Pacific is run by Christophe Cerisier, and its loans and syndication team by Alexis Postel-Vinay, was able to execute private loans that catered to different pockets of liquidity.

BNP Paribas certainly made its mark this year, with even rivals praising the bank’s loan growth. Will it be able to continue that momentum next year? Watch this space.