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A growing crowd of Asian banks are lining up to meet fixed-income investors as bankers keep a wary eye on volatile markets. Conditions in the credit market have been on a rollercoaster ride, but the low rate environment offers borrowers the opportunity to lock in funds at relatively low cost.
“A lot of the banks are looking for funding,” said one banker. “Some have been planning to tap for a while, but unfortunately markets turned against them. However, if a borrower is willing to look at pricing from an absolute yield basis, it can be attractive.”
Maybank is starting the ball rolling, with roadshows in Singapore today and Hong Kong on Monday. The Malaysian bank’s own investment banking unit will act as joint bookrunner alongside Barclays Capital, the sole foreign bank on the deal — a rarity in Asia’s international bond market.
According to one source away from the deal, Maybank is expected to issue a $300 million to $500 million senior bond. The bank is said to need funding after buying Singapore’s Kim Eng Securities for $1.4 billion earlier this year and issued a S$1 billion lower tier-2 bond in April.
In Korea, a queue of banks and companies are waiting. Shinhan Bank is expected to be first off the block. The Korean lender has mandated Bank of America Merrill Lynch, BNP Paribas, Deutsche Bank, HSBC and Standard Chartered, and is eyeing a potential US dollar bond.
Further down the queue is Hana Bank. The Korean lender is said to be considering a lower tier-2 and was on the road earlier this month. BoA Merrill, Barclays Capital, Citi and HSBC are joint bookrunners.
In the corporate space, Korea National Oil Corp yesterday started fixed-income investor meetings. Barclays Capital, BoA Merrill, HSBC, Korea Development Bank and Royal Bank of Scotland are the arrangers. A US dollar bond offering might follow, subject to market conditions.
Bankers expect more issuance from the country. “There is an awful lot out of Korea,” said one. “We’re expecting about 10 mandates in the next five weeks.”
In Singapore, DBS Bank has mandated BoA Merrill and Goldman Sachs, as well as its own bond team, to arrange a series of US fixed income investor meetings “in conjunction with evaluating financing options in the capital markets”.
DBS Bank was in Los Angeles on Thursday, San Francisco today, Chicago on Monday, Boston on Tuesday and New York on Wednesday.
In Vietnam, VietinBank has mandated HSBC and Barclays Capital as joint bookrunners for a US dollar bond to raise about $500 million and a deal is expected around the fourth quarter. As there has been very little bond issuance out of Vietnam this year, VietinBank is expected to be a tougher sell. “Clearly, the market is more challenging for VietinBank,” said one banker.
Also waiting on the sidelines are Indian banks that have concluded roadshows, including the likes of Union Bank of India and Indian Bank.
Away from the dollar bond market, Khazanah Nasional will be kicking off investor meetings for its dim sum sukuk in Hong Kong on Monday and in Singapore on Tuesday. The deal is the first sukuk in the dim sum bond market. BOC International, CIMB and RBS are joint bookrunners.
