FinanceAsia is pleased to announce the winners of this year's Deal Awards for Australia and New Zealand.
The following deals have been chosen for their size, innovation and deft execution. In many cases, bookrunners and lead managers overcame several obstacles, including volatile market conditions and new regulatory hurdles, to bring these deals to fruition.
The award winners and their clients will be honoured at our 13th annual Australia and New Zealand awards celebration dinner on Tuesday, February 2, 2016 at the Park Hyatt on Sydney Harbour. For more information on this event, please contact Vicki Shaw at [email protected] or +61 2 9967 5774.
The winners of our House Awards will be announced on Thursday, December 17.
Link Administration, A$947 million
Citi, Deutsche Bank, Macquarie Capital, UBS
Trading up through choppy markets towards the end of the year, the A$947 million ($683 million) initial public offering for share registry Link Administration is a shining example of a well-executed private equity exit. Selling shareholders, including Pacific Equity Partners, managed to price the deal at the top of the A$5.41 to A$6.37 range following a global roadshow that targeted almost 230 investors. The institutional tranche was ten times oversubscribed with nearly 90% of the shares going to long accounts rather than hedge funds. Asian investors took about 11% of the stock, while 16% went to European and American investors all keen for exposure to Australia’s growing superannuation market.
BEST SECONDARY OFFERING
National Australia Bank's entitlement offer, A$5.52 billion
Macquarie Capital, Merrill Lynch, Morgan Stanley
2015 was notable for a string of large-scale equity raisings by domestic commercial banks, none more so than National Australia Bank’s combined A$5.52 billion institutional and retail entitlement offer in May. This was the largest ever underwritten equity raising in Australia and the largest ever rights issue, representing 8% of the bank’s issued capital. The bookrunners achieved a 97% participation rate on the institutional component (above the comparable average of 90%) and a 72% participation rate on the retail offer (above the 59% average). The issue priced at a 15.6% discount to the theoretical ex-rights price and a 16.7% discount to last close on May 6.
BEST HYBRID DEAL
Crown Resorts' subordinated notes, A$630 million
ANZ, Commonwealth Bank of Australia, Deutsche Bank, National Australia Bank, UBS, Westpac
Competing against BHP Billiton’s giant $6.5 billion hybrid for this award, the gong goes to Crown Resorts’ A$630 million 60-year unsecured subordinated note transaction for its domestic focus and its deft execution. Local investors who have over-fed on bank hybrids viewed the Crown note as a diversification play and liked the yield on offer. After a carefully executed marketing plan, the order book generated more than $850 million in demand in about 48 hours. The notes had an indicative price range of 400bp-420bp over the 90-day BBSW [bank bill swap rate] and priced at the low end, 1% lower than the margin on Crown’s first hybrid in 2013. The deal achieved a 50% equity credit rating from agencies.
BEST M&A DEAL
NSW Electricity Networks’ A$10.3 billion lease of Transgrid
Advisers to NSW government: Deutsche Bank, UBS
Advisers to NSW Electricity Networks: JP Morgan, Royal Bank of Canada
Scraping into this year’s awards period by a whisker, the New South Wales government’s first sale in a planned programme to offload 49% of its electricity network achieved a price tag beyond market expectations. This was the largest privatisation since the sale of Telstra and the biggest trade sale. With the help of advisers Deutsche Bank and UBS, the NSW government ran an efficient and transparent sale process. The successful bidder for the 99-year lease of Transgrid was a consortium comprised of Hastings Fund Management, Spark Infrastructure, the Abu Dhabi Investment Authority, CDPQ, and Wren House, part of the Kuwait Investment Authority. The buyers paid a premium valuation of 1.64 times the regulated asset base as of June 2015.
BEST LOCAL BOND DEAL (Joint)
Australian Unity's simple corporate bond, A$250 million
ANZ, Evans and Partners, National Australia Bank
Good things come in small packages and Australian Unity’s successful quest to be the first company to issue under new simple corporate bond legislation is one of those things. The healthcare and financial services provider announced its offer of series B bonds to the market in early November. While the new legislation is designed to open access to the bond market for unrated issuers, investors identified Australian Unity as an investment grade credit, resulting in the deal being upsized from an original target of A$200 million and pricing at the bottom of the range. The structure of the deal allows the issuer to undertake future “taps” over a three-year period, utilising a short-form offer-specific prospectus.
Apple Inc's kangaroo bond, A$2.2 billion
Commonwealth Bank of Australia, Deutsche Bank, Goldman Sachs
A joint winner of this award for its size and novelty factor, Apple Inc’s debut 4- and 7-year kangaroo bonds in August introduced a new name to Australia’s highly rated corporate issuer line-up. Australian dollar issuers in the AA+ ratings band are typically financial institutions, so the Apple transaction gave investors a valuable opportunity to diversify. Due to its global brand name, Apple side-stepped the need for a physical roadshow and hosted teleconference calls instead. Order books were filled within hours and the deal priced at a US dollar spread equivalent of 14-26 basis points tighter than where Apple could have priced in the US markets.
BEST INTERNATIONAL BOND DEAL
APT Pipelines Euromarket bond, $2.3 billion equivalent
BNP Paribas, HSBC, National Australia Bank, RBS
Heralded as the largest Euro corporate bond transaction for an Australian BBB issuer, the circa $2.3 billion three-tranche euro/sterling bond for APT Pipelines in March is the winner of our Best International Bond Deal. The transaction formed part of the financing of APT’s acquisition of the QCLNG facility in Queensland, which converts gas from coal seams into liquefied natural gas, or LNG. APT’s parent, natural gas infrastructure business APA Group, had a track record in sterling issuance but not in euro. A comprehensive roadshow and support by cornerstones ensured that the three tranches were oversubscribed within hours. APT was able to tighten 5-8 basis points from initial guidance across the tranches which closed with orders of over €1.4 billion, €1 billion and £1.1 billion for the 7, 12 and 15-year deals respectively.
BEST DEBT FINANCE DEAL
GE Consumer acquisition warehouse financing, A$6.7 billion
Deutsche Bank, KKR Capital Markets, Värde Partners
When Deutsche Bank, KKR and Värde Partners announced plans to purchase GE Consumer’s Australian non-bank finance business for an enterprise value of A$8.2 billion it initiated one of the most complex and innovative financing packages the country has witnessed. The business had previously been financed on GE Capital’s balance sheet and needed to be moved to external financiers. The challenge was to devise a structure that worked for the diverse asset portfolio of receivables across credit cards, store finance, personal, auto and mortgage loans. In the end, the trio utilised a combination of local and international banks and was able to negotiate a three-year warehousing tenor, for which there were few precedents in the market.
BEST PROJECT FINANCE DEAL
Astra SLR Finance, A$1.5 billion
Banco Santander, Bank of Nova Scotia Asia, Commonwealth Bank of Australia, Credit Agricole
The construction of a greenfield public-private partnership light rail transport link through the middle of Sydney’s busiest street will transform access to the city’s central business district which is why the financing of the project attracted broad oversubscription from lenders. The A$1.5 billion in senior secured credit facilities cover both a four-year construction period and three-year operating phase. The transaction was 1.7 times oversubscribed and introduced nine new lenders to the sector, broadly composed of Australian Institutional investors, Japanese and Chinese based lenders, European banks and an Australian domestic bank. Lenders liked the apportioning of risk between civil contractors, rolling stock, operators, and debt and equity providers.
MOST INNOVATIVE DEAL
ANZ green bond, A$600 million
Green bonds aren’t new but Australia has lagged offshore markets in issuance, so ANZ’s inaugural offering of a A$600 million five-year green bond in May added much needed depth and diversification. ANZ generated a robust response from investors with about one-fifth of orders coming from first-time buyers of ANZ bonds. The securities priced on par with identically rated floating-rate notes issued by Australian commercial banks, yielding 3.385% or 80 basis points over asset swaps. The bank plans to use the proceeds to finance A$1.1 billion worth of loans to wind farms, solar energy firms and green buildings in Australia, New Zealand and parts of Asia. It is hoped ANZ’s foray into green bonds will encourage other Australian firms to issue in this important security class.
BEST NEW ZEALAND DEAL
CBL Corporation IPO, NZ$125 million
Forsyth Barr, UBS
As IPOs go, the NZ$125 million dual-listing of CBL Corporation in October was a textbook case of how to overcome obstacles to achieve shareholder objectives. The transaction was the first listing under new Financial Markets Conduct Act rules in New Zealand and required the deal team to liaise with regulators in multiple jurisdictions including Australia and the UK. IPO market conditions were tough with 10 out of the last 13 issues trading below offer price on listing, and the CBL deal came during a period of volatility in Chinese and global stock exchanges. Still, the vendors set a strong positive signal to the market by selling less than 15% of their shares and the book was well covered. By early December CBL was trading nearly 50% above its IPO price.
This article was amended on December 16 to reflect the fact Australian Unity's simple corporate bond was upsized to A$250 million.