Earlier this month we revealed the Country Deal Award winners of the Achievement Awards for 2019. These are the best capital markets transactions in each country since December 1, 2018.
It goes without saying that the quality of the submissions this year was unparalleled across all categories and competition was extremely tight.
Here we present the rationale for our decisions, why it was that these deals stood out.
The Achievement Award winners and their clients will be honoured at our annual celebration dinner on February 13.
For more information on this event, please contact Keith Frith at [email protected] or +852 2122 5266.
BEST BANGLADESH DEAL
United Mymensingh Power’s Tk5 billion zero coupon Islamic certificate
Lead arranger: Standard Chartered
The Tk5 billion ($60 million) debt issue for United Mymensingh Power (UMP) was an important deal for the development of Bangladesh’s capital markets. It represented the first zero coupon Islamic certificate from a country with very few Shariah-compliant transactions, but a huge amount of potential given the size of the wider Islamic banking market.
The deal’s genesis lay in UMP’s requirement for local currency liquidity options to re-finance capital expenditure. In the past, the power generation offshoot of the United Group had used foreign currency loans to establish two power plants.
That was no longer an option. Rising Libor and foreign exchange rates were increasing the company’s debt burden and UMP wanted alternative financing solutions.
On the other side of the deal was a second Standard Chartered client, which required long-term Shariah-compliant investment solutions for its surplus cash flows. It became the investor.
The structure worked for the issuer because it curtailed its exposure to interest rate fluctuations. It also secured good pricing given the 7.75% headline rate was fixed 100 basis points (bp) below equivalent government debt.
The offering, executed in August, also brought down UMP’s financing costs and allowed it to pay off foreign currency loans, thereby reducing its exposure to international financial volatility.
The transaction also worked for the investor by providing a fixed rate of return.
BEST CAMBODIA DEAL
ABA Bank’s CR84.8 billion retail bond
Lead manager: SBI Royal Securities
Legal advisor to the issuer: R&T Sok & Heng
After dipping its toes into the bond market last year, Advanced Bank of Asia (ABA) produced only the third-ever bond from Cambodia in August this year. What made the CR84.8 billion ($21 million) deal stand out was the fact that it represented the first retail bond from a country where there is not even a sovereign yield curve yet.
Following a roadshow at the Cambodia Securities Exchange, ABA Bank sold three-year notes with a coupon of 7.75%. This represented the wide end of the 7.00% to 7.75% price guidance.
The majority of the paper stayed onshore, with 60 of the 65 subscribers comprising retail investors.
What gave ABA Bank’s bond a further boost was the fact that it is the first to carry a rating. Thanks to its majority ownership by National Bank of Canada, it was rated B by S&P with a positive outlook.
“We are excited about the results of S&P’s B rating, which is the same as Cambodia’s sovereign rating. It validates our strong financial status in the banking industry,” said ABA Bank chief executive Askhat Azhikhanov at the time.
S&P said its positive outlook was underpinned by the bank’s continuous loan and deposit growth, its increasing market share and good profitability.
ABA Bank also highlighted that net proceeds from the bond issuance would support rural micro-, small- and medium- enterprises, including female entrepreneurs in Cambodia.
BEST CHINA DEAL
China Railway Signal & Communication Corp’s Rmb10.5 billion STAR Market IPO
Bookrunners: Goldman Sachs Gao Hua Securities, Citic Securities, BOC International (China), Morgan Stanley Huaxin Securities and TF Securities
Legal advisor to the issuer: Zhong Lun
This Rmb10.5 billion ($1.53 billion) IPO not only demonstrated what is currently possible in China, but also the scale of the country’s ambitions as it tries to build capital markets to rival those in the US.
One of this year’s major developments was the launch of Shanghai’s Science & Technology Innovation Board (STAR) in Shanghai this July. China views the STAR Market as a long-term rival to the Nasdaq and successor to Shenzhen’s ChiNext, which has never quite been able to hit the mark over the past decade.
It is also a market where China is testing out new initial public offering (IPO) rules such as scrapping the initial price cap of 23 times price-to-earnings. This was one of the factors, which enabled China Railway Signal & Communication Corp (CRSC) to take advantage of the new market’s momentum and strong share price performance by pricing at a premium to its stock price in Hong Kong.
The IPO pricing was, nevertheless, still fixed at a relatively modest 18.18 times 2018 earnings at a time when the industry average in the month before the flotation was 37.96 times. It came at Rmb5.85 ($0.85) per share, while in Hong Kong, CRSC was then trading at HK$6.05 ($0.7757).
Bankers said the pricing reflected future growth in the company. Analysts were also positive with Huachuang Securities rating CRSC as “recommended” in its research report.
Investors concurred with both, pushing the stock up 100% on its first day trading to a 175% premium over its H-shares. Like many other STAR Market stocks, CRSC has come back down to earth since then, but unlike many of its peers, it remains above is IPO price and is currently the most heavily traded STAR Market stock.
It was both a successful and landmark deal. As a result, the provider of rail transportation control solutions was able to achieve: the largest A-Share IPO this year, the largest A-Share IPO of a state-owned enterprise since 2016, the largest H to A-share IPO ever and the first H- to A-share IPO on the STAR Market.
CRSC also became the first Rmb100 billion company listed on the STAR Market and a top 100 company in terms of market capitalisation on the A-share market.
BEST HONG KONG DEAL
HK$25.2 billion credit facilities for the privatisation of Hopewell Holdings
Lead arranger: Citi
Legal advisor: Freshfields Bruckhaus Deringer
It marked an end to the company’s 47-year listing on Hong Kong stock exchange, but at a time when Hong Kong’s property market was wobbling, founding chairman Gordon Wu led the largest property company privatisation ever seen in the Territory.
In December last year, Wu offered HK$38.80 ($4.96) per share to buy out the 63.07% of shares owned by other shareholders and take the company private.
The HK$21.256 billion ($2.926 billion) deal received 97.87% of votes in favour three months later in March after being priced at a 47% premium to the stock’s closing price on November 30.
That should not have been a surprise. Southeastern Asset Management, Hopewell’s second-largest shareholder, had already indicated that it intended to support the plan.
Petrus HK, the SPV that Wu and his family had set up, arranged a HK$25.2 billion ($3.22 billion) credit facility with Citi to fund the transaction.
This comprised: a HK$6.5 billion nine-month term loan facility, a HK$7.5 billion three-year term loan facility, a HK$8.2 billion five-year term loan facility and a HK$3 billion five-year revolving credit facility.
Syndication was a blowout success, closing within three weeks of launch.
As FinanceAsia wrote at the time, Wu’s timing for the loans was cleverly done. It was launched just as other property magnates were struggling to secure debt finance. Notable was Chinese entrepreneur Chen Chang Wei’s difficulties financing the HK$15 billion purchase of two Hong Kong office towers.
BEST INDIA DEAL
Embassy Office Parks’ Rs47.5 billion REIT IPO
Global co-ordinators: Morgan Stanley, Kotak Mahindra Capital, JP Morgan, BofA Securities
Bookrunners: Axis Capital, Credit Suisse, Deutsche Bank, Goldman Sachs, HSBC, IIFL Holdings, JM Financial, Nomura
Legal advisors to the issuer: Clifford Chance Wong, Cyril Amarchand Mangaldas, Simpson Thacher & Bartlett
The Rs47.5 billion ($687 million) IPO by Embassy Office Parks represented a notable breath of fresh air in India’s capital markets this year. Not only was it the first REIT IPO in the country; it was also the largest non-financials IPO since January 2013.
US asset management firm Blackstone Group and Indian real estate developer Embassy Group were the sponsors of the REIT, which comprises seven office parks and four prime city-centre office buildings in Bengaluru, Pune, Mumbai and Noida.
Good market communication was the essence of the deal’s success against a volatile market backdrop.
In October 2018, there had been an early look roadshow across Asia, the UK and the US with more than 40 investor meetings. Meetings with domestic investors followed at the end of the year.
The first six weeks of 2019 were used to begin firming up demand ahead of a broader roadshow just before the deal was formally launched in mid-March.
In the end, the IPO priced at Rs300, the top of the indicative range. This came off the back of significant oversubscription for the IPO as a whole and the Qualified Institutional Buyer category.
The order book had a 75% participation ratio from foreign investors, which accounted for 90% of the anchor book.
It was also noticeable for the presence of marquee foreign long only investors such as Capital Group, Aviva, Schroders and Fidelity. Indeed Capital Group came in as a strategic investor portion for around 18.5% of the deal.
The deal has also had a phenomenal secondary market performance, rising 41% to mid-December, compared to an overall 9.5% rise in the NIFTY 50 over the course of the year. It was a particularly accomplished achievement given that India’s other yield related offerings from the infrastructure investment sector have performed so poorly.
BEST INDONESIA DEAL
PT Lippo Karawaci’s $1.01 billion restructuring
Sole financial advisor to Lippo Karawaci and dealer-manager for the bond tender: Credit Suisse
$730 million rights issue: Credit Suisse
$410 million 7.0% senior notes due 2022: Credit Suisse
$425 million 6.75% senior notes due 2026: Credit Suisse
Legal advisor to issuer: Allen & Gledhill
The comprehensive restructuring of PT Lippo Karawaci, this March, stood out as the most impressive business transaction in Indonesia during a difficult year for the country’s real estate developers.
The integrated real estate company secured $1.01 billion as part of a comprehensive strategic transformation plan to: recapitalise the company; revamp its management team and; focus its attention, more keenly, on three core competencies: urban housing, lifestyle malls and healthcare.
The financing included: $730 million from a rights issue underwritten by the Riady family, as well as $280 million from the divestment of a number of assets including its healthcare portfolio in Myanmar and a mall in Jakarta.
This enabled the company to deleverage its balance sheet with a partial bond buyback programme. It also provided a liquidity buffer for all debt interest payments and REIT rental obligations up to the end of next year.
The restructuring plan was welcomed with open arms. The company’s shares rebounded rising 21% from their mid-March lows to early-December.
The group’s bonds are also among the best performing in the region this year. Its 7% 2022 bonds, for example, have tightened in from a yield around the 19% mark in late February to 7% in December.
Analysts cheered the turnaround. Maybank Kim Eng, for one, reiterated its “buy” on the company with a 45% upside to its target price in March. It said that the restructuring would “lift uncertainty over its liquidity outlook and unlock the value of its many stalled property developments”.
But the icing on the cake came in July when ratings agency S&P upgraded Lippo to B- from CCC+.
“The upgrade is an affirmation of the substantial improvement in Lippo Karawaci’s liquidity position ever since we embarked on our strategic transformation plan,” said new chief executive John Riady in a statement.
BEST KOREA DEAL
LG Chem’s $1 billion and €500 million green bond
Global co-ordinators: BofA Securities, BNP Paribas, Citi, HSBC, Morgan Stanley, Standard Chartered
Legal advisors to the issuer: Cleary Gottlieb Steen & Hamilton, Lee & Ko
The $1.56 billion equivalent deal from the country’s largest chemical company in April stood out for a number of reasons. Not only was it the largest-ever international bond issued by a Korean private sector company, it was also the first bond from a chemical company targeting sustainable projects. Both factors helped it to achieve the largest-ever order book for a Korean private sector corporate bond.
All the more impressive was the fact that it was LG Chem’s debut issuance in the international debt capital markets.
Unsurprisingly, it was the green portion of the book that attracted attention – the more so given that the company is not a traditional green issuer. Post execution, chief operating officer Jeong Ho-young said that the successful sale of the green tranche was a result of the company’s continuous efforts and an acknowledgement of its competitive role in the electric vehicle battery sector.
When the deal was launched, the order book built strongly from Asia. In the end, it exceeded €4.1 billion for the four-year Euro-denominated tranche, $2.2 billion and $2.6 billion for the 5.5-year and 10-year notes, respectively.
This allowed pricing to come in quite tightly by 27.5bp to 30bp across all three tranches to: respectively 95bp and 117.5bp over Treasuries for the US dollar tranches and mid-swaps plus 65bp for the Euro tranche.
BEST LAOS DEAL
Ministry of Finance’s €135 million senior unsecured financing facility
Lead Arranger: Credit Suisse
The €135 million ($149.5 million) five-year senior unsecured financing facility for the Lao People’s Democratic Republic in June marked another step in the country’s engagement with the international financial markets.
For the past six years, Laos has been making its mark in the Thai bond market where the government has issued seven times.
The thinking behind this new deal was deliberate. The ministry maintains a basket of currencies and wanted to diversify away its reliance on the Thai baht.
Fortunately, the deal came just ahead of the sovereign’s one-notch downgrade by Thai rating agency TRIS Ratings to BBB, but it was by no means straightforward.
The economy is still on the road to recovery following major floods in 2018. There are also concerns about the country’s ballooning external debt to GDP ratio, which has risen to close to 55% and is expected to rise to more than 70% over the next few years.
Despite the challenging environment, Credit Suisse was able to meet the government’s needs for a long-dated tenor with an amortising schedule. The deal was not syndicated but taken on the bank’s balance sheet.
One banker close to the deal called the pricing “attractive” competing as it was against concessional loans and multilaterals.
It may have also helped Credit Suisse to secure a lead management slot on the sovereign’s forthcoming debut international G3 currency bond. This is expected early next year and is shaping up to be one of the most exciting transactions from the frontier markets in 2020.
BEST MALAYSIA DEAL
Serba Dinamik Holdings’ $300 million senior unsecured Sukuk
Global co-ordinator and Shariah advisor: HSBC
Bookrunner: Credit Suisse
Legal advisors to the issuer: Clifford Chance, Zaid Ibrahim & Co
When Malaysian oil and gas services company, Serba Dinamik, priced its debut trade in May it was notable for a number of reasons. Not only was it the first high yield-rated Sukuk globally this year, it was also the first-ever high yield-rated Sukuk from Asia.
Execution of the Wakala Bil Istithmar Sukuk deal was exemplary and saw significant compression from initial price guidance thanks to a book that was covered more than three times.
The company announced the mandate on April 23 then embarked on a roadshow across Singapore, Hong Kong and London. Following the receipt of strong indications-of-interest (IOSs), Serba began bookbuilding on May 2, for a $300 million three-year senior unsecured Sukuk, with initial price guidance in the 6.625% area.
The order book passed $500 million before lunch and when final price guidance of 6.3% to 6.4% was announced that evening, books hit a peak of $1.5 billion. The $300 million deal eventually priced at par to yield 6.3%.
The deal allowed the company to refinance its short-dated facilities, fund its future capital expenditure and working capital needs, while raising US dollar-denominated financing to match its dollar cashflows from the Middle East.
BEST MONGOLIA DEAL
Mongolian Mining Corp's tender, consent solicitation and $440 million bond
Bookrunners: JP Morgan, Morgan Stanley
Financial advisor: Frontier Strategies
Legal advisors to the issuer: Davis Polk & Wardwell, ELC, Walkers
In April, Mongolian Mining returned to the capital markets with perfect timing to undertake a liability management exercise that rode the back of improving sentiment towards the country as Mongolia successfully met the targets of its current IMF programme.
The company, lead managers and lawyers undertook a complex series of concurrent transactions incorporating: a tender offer for cash of existing senior and perpetual notes; a consent solicitation to release collateral on the existing senior notes and a new senior high yield bond. Together, this represented Asia ex-China’s first successful refinancing for a debt-restructured company.
The company had defaulted on its debt obligations in 2016 after coking coal prices fell by more than 50%. In one of the most complex liability management exercise seen in Asia to date, Mongolian Mining finalised a restructuring of $828.9 million of debt in May 2017.
The new $440 million five-year bond represented the largest single tranche five-year deal for a high yield corporate in Asia, since April 2017.
The order book was formally covered within two hours of launch, with the final book hitting $740 million. This allowed the leads to tighten pricing by 25bp to a reoffer yield of 9.25%.
Although Asian investors anchored the book, there was also distribution across all three geographies with targeted real money investors supporting the issue in volume.
BEST MYANMAR DEAL
Yoma Strategic Holdings’ Bt2.22 billion bond
Bookrunner: Bangkok Bank
Financial advisor: Twin Pine Group
Legal advisor to the issuer: Baker & McKenzie
This deal was a true first, representing the debut offshore bond from Myanmar. The Bt2.22 billion ($70 million) five-year by Yoma Strategic Holdings also underlined Thailand’s role as a regional financing centre and springboard for companies across neighbouring countries like Cambodia and Laos that do not have functioning capital markets of their own.
Yoma is a leading conglomerate based in Myanmar but listed on the Singapore Stock Exchange. It had been looking at a bond issue as far back as 2017 and had conducted some non-deal roadshows.
It eventually decided to look at the Thai capital markets to raise capital because it was big enough and it wanted to expand its investor base.
Since Myanmar does not have a sovereign credit rating or a benchmark government yield curve, Yoma decided to pursue a guaranteed bond offering format from the Credit Guarantee and Investment Facility (CGIF), a multilateral facility established by ASEAN+3 and the Asian Development Bank.
Approval from Thailand’s Public Debt Management Office at the Ministry of Finance was conditional upon Yoma receiving the full guarantee from CGIF. Its letter of guarantee arrived only just before Christmas 2018 and assigned the deal an AAA rating. But it left only a month for the placement and execution.
In the end, demand was such that books were covered 2.5 times and the 3.38% paper was distributed to buy-and-hold institutional Thai investors, like life-insurance companies, government-related institutions and commercial banks. “There are only a couple of trades a year,” said one banker close to the deal.
BEST PAKISTAN DEAL
Interloop’s PRs5.025 billion IPO
Bookrunner: Ismail Iqbal Securities
Financial advisor: Arif Habib
Legal advisors to the issuer: Haidermota & Co, Bhandari Naqvi Riaz
This was a clear standout as deal of the year from Pakistan given that the PRs5.025 billion ($51.32 million) offering represented the country’s largest private sector IPO to date and the only one executed on the Karachi Stock Exchange this year.
Faisalabad-based Interloop is the largest global supplier of socks to Nike, Puma, Target and H&M. It initially laid plans for an IPO in 2017, but it took until the end March this year before Pakistan’s largest private sector IPO to date appeared.
Financial advisor Arif Habib recommended that the company demerge its non-textile assets. These included investments in dairy, IT, real estate and mutual fund investments.
Post demerger, Interloop was a purely hosiery-based business. This not only provided an opportunity to market a purely textile sector company to potential investors but also paved the way for a higher valuation.
Nevertheless, getting regulatory approval was a challenge as the Pakistan Stock Exchange and Securities and Exchange Commission demanded that the business plan either be fully funded or a secondary source of funding made available in case the IPO was not successful.
All approvals were in place by the end of 2018 and Interloop went ahead with the IPO towards the end of March.
For the placement, it targeted larger institutions like Habib Bank, Jubilee Insurance, Meezan Investment Management, EFU Life Assurance and United Bank. Together, they took more than 80% of the issue.
The strike price for Interloop was set at PRs46.10 using the Dutch auction method. Since then Interloop has traded strongly, rising a quarter to mid-December compared to a 10% overall rise in the KSE 100 Index over the course of the year.
BEST PHILIPPINES DEAL
AllHome Corp’s P14.9 billion IPO
Global co-ordinator: UBS
International bookrunners: CLSA, Credit Suisse
Local underwriters: China Bank Capital, PNB Capital
Legal advisors to the issuer: Picazo Buyco Tan Fider & Santos, Latham & Watkins
The P14.9 billion ($295 million) IPO for AllHome Corp represents the country’s largest flotation since Shell Philippines in October 2016. It was also first 144A and Reg-S flotation from the Philippines in seven years.
As such, it was a worthy winner in a country where investors have long cried out for more IPOs particularly from the consumer sector.
AllHome is a home improvement retailed owned by well-known businessman Manuel Villar. It was only founded in 2013 and is an affiliate of the Villar Group, which owns Vista Land, the largest homebuilder in the Philippines.
It operates 27 stores across 22 cities and municipalities.
The IPO was not just a successful capital markets transaction; it was also clever move from a strategic point of view. With IKEA opening up in the Philippines next year, the IPO proceeds could well help to keep the Swedish newcomer at bay.
In the end, the book was multiple times subscribed with a good mix of high-quality long only, domestic, sovereign and multi-strategy investors. It was also concentrated with the top 15 investors taking more than 80% of the deal.
This deal priced at 40.1 times estimated 2019 earnings: a 27% premium to peer comps despite volatile market conditions and a bearish performance from both Philippines and regional retailers at the time.
It is a sign of the strength of the name that it continues to trade above water.
BEST SINGAPORE DEAL
SC Health Corp’s $173 million IPO
Global co-ordinator: Credit Suisse
Co-manager: I-Bank Securities
Legal advisors to the issuer: Ropes & Gray, Walkers
This is a deal that stands testament to financial innovation, representing the first IPO of a Special Purpose Acquisition Company (SPAC) from South East Asia on the New York Stock Exchange. SPACs are blank cheque companies that look for mergers, share exchanges, asset acquisitions and other types of purchases.
In this case, SC Health Corp intends to target the healthcare sector across Asia Pacific. It is an affiliate of SIN Capital, which owns Asia’s largest primary care provider, Fullerton Health.
Its founder, David Sin, was inspired by another New York listed SPAC set up by Hong Kong’s former finance secretary Antony Leung.
SIN Capital has always approached the capital markets in an intriguing way. In 2017, for example, Fullerton Health became the first Asian healthcare company to print a US dollar perpetual.
Where SC Health is concerned, the group sold 17.3 million units priced at $10 each. Each whole warrant entitles the holder to purchase one Class-A ordinary share at a price of US$11.50.
Another interesting aspect about the deal is the fact that SC Health Corp specifically targeted hedge funds. As one banker with knowledge of the matter said: “This was not a Fidelity/ Black Rock environment”.
The offering was marketed via a two-day roadshow during which management reached 15 investment funds through group, one-on-one meetings and conference calls.
The attractive investment structure was met with significant investor demand, resulting in an order book that was five times oversubscribed and comprised more than 60 investors.
The deal has been a fantastic success for SIN Capital and Fullerton Health, raised their international profile. Fullerton Health is also currently progressing well in its plans to raise around $400 million in the private equity markets, primarily from US investors.
BEST SRI LANKA DEAL
SriLankan Airlines $175 million bond
Bookrunners: Credit Suisse, Standard Chartered
Legal advisors to the issuer: Allen & Overy, Julius & Creasy
Every year, FinanceAsia ends up having to choose the sovereign’s bond as Country Deal of the Year due to the lack of alternatives. In recent years, Sri Lanka has been a country that never quite lives up to its promise.
It initially looked as if 2019 would be no different. The country has been continually rocked by a volatile political environment in the run up to November’s presidential elections and the terrible East Sunday terrorist attack against churches and three luxury hotels in Colombo.
But at a time when there were still travel advisories against flying into the country, the national carrier, SriLankan Airlines, successfully executed a $175 million, five-year fixed rate Reg S bond guaranteed by the government.
It was the first non-sovereign bond from the country since 2014 and the first airline bond this year.
It was an exemplar of perfect execution and played into investors’ desire for diversification away from the sovereign into the quasi-sovereign sector. The deal was carefully timed to match the due date of SriLankan Airline’s US$175m 5.3% government-guaranteed paper that matured at the end of the same month.
The order book hit $500 million by lunchtime on its launch day and by early evening momentum was such that books had hit $1.2 billion and were 5.7 times covered.
This distinctly helped pricing. At final guidance of 7% to 7.125% books stood at $1 billion from 93 accounts.
In the end, SriLankan Airlines priced the paper at the tight end of guidance (a hefty 50bp inside initial price guidance). The order book had a split, which saw 84% of the paper placed into Asia and 16% into EMEA.
BEST TAIWAN DEAL
KKR-led consortium’s NT$45.32 billion acquisition of LCY Chemical Corp
Financial advisor: Goldman Sachs
Legal advisors to the acquirer: Lee & Li, Simpson Thacher & Bartlett
Legal advisor to the seller: Baker & McKenzie
KKR’s NT$45.32 billion ($1.83 billion) acquisition of LCY Chemical Corp this year marked a return to Taiwan with a bang rather than a whimper. Its first deal in Taiwan for over a decade represents the largest-ever private equity-backed transaction on the island, according to Thomson Reuters data.
“LCY is a truly differentiated, high-performing company in the field of petrochemicals, with a strong team that’s dedicated to quality and innovation,” said Paul Yang, head of KKR Greater China, after the deal had closed at the end of January this year.
The deal is the more impressive considering what a challenging jurisdiction Taiwan is for financial sponsors to make investments.
Founded in 1965 and headquartered in Taipei, LCY is a producer of speciality chemicals with a concentration on thermoplastic rubbers and performance plastics used in infrastructure, healthcare, household, automotive, textile and electronic products, among other diverse applications.
The deal began in July last year when KKR offered to acquire all of the issued and outstanding shares of LCY for NT$56.00 ($1.84) per share in cash.
The debt financing for the acquisition was complex due to the sheer size of the facility and the multiple banks involved, as well as the global nature of the LCY group – it has production plants, for example, in Taiwan, mainland China and the US.
Uniquely, the debt financing commitments were refinanced between the announcement of the tender offer and the closing of the tender offer.
BEST THAILAND DEAL
Asset World Corp’s Bt48 billion IPO
Domestic co-ordinators: Bualuang Securities, Kasikorn Securities, Phatra Securities, Siam Commercial Bank
Global co-ordinators: BofA Securities, Morgan Stanley, UBS
Co-managers: Daiwa, Mizuho
Legal Advisors to the issuer: Latham & Watkins, Weerawong C&P
The Bt48 billion ($1.58 billion) IPO of Asset World Corp was a blockbuster on every level. The September flotation of Thailand’s leading integrated lifestyle real estate group was not only the largest IPO from Thailand since 2013, but also the first-ever to enter the benchmark SET 50/100 after its first trading day.
Asset World is part of the TCC Group and has interests in beverages, retail and property. The company is a play on Thailand’s real estate and leisure markets given its portfolio of hotels, retail, wholesale and office properties, plus its integrated mixed‐use developments in prime business and tourist locations across the country.
A successful marketing strategy combined with a comprehensive investor education process resulted in around half of the base offering being subscribed by cornerstone investors including: GIC, BBL Asset Management, Kasikorn Asset Management, SCB Asset Management, and Aberdeen Standard Asset Management.
As with so many deals this year, the IPO was priced against a volatile equity markets backdrop. It was particularly notable that it achieved premium pricing at 32.3 times 2020 forecast EV/Ebitda compared to a 9.8 times average for peers.
Unlike many other Thai IPOs there was also a fairly even split between domestic and international investors.
BEST VIETNAM DEAL
VNLIFE Corp’s $300 million private placement
Private placement agent: UBS
In recent years, the best deal from Vietnam has always been a tough call because there have been so many landmark transactions. This one was no different.
Yet the private placement for VNLIFE stands out because it represents the largest private placement round in Vietnam over the past decade and the first direct investment by an Asian sovereign wealth fund into Vietnam’s fintech space.
VNLIFE is the parent company of payments firm VNPAY and although it did not declare the amount it raised, the $300 million figure was widely reported in the national and international press at the time.
The investment from SoftBank’s Vision Fund and Singapore sovereign wealth fund GIC is an indication of the attractiveness of the burgeoning payments market in a country where retail banking remains under-penetrated.
It is also one that is highly competitive as VNPAY races against rivals like Warburg Pincus-backed MoMo, VNG’s ZaloPay, and NTT DATA’s Payoo to capitalise on Vietnam’s plan to become a cashless economy by 2027.
“Investors are looking for early market leaders and VNPAY is very well integrated,” said a banker with knowledge of the matter. Payment services might be competitive but “they saw an attractive opportunity,” he added.
The mobile payments market is expected to hit $109 billion by 2025, according to research from Nomura.
Although GIC already has a number of investments in the country, VNLIFE is the first company in Vietnam to make it into Softbank Vision Fund’s portfolio.