FinanceAsia Achievement Awards 2011

Our complete 2011 awards line-up, including the winners of best bank, best investment bank and deal of the year.

The following banks will be honoured at an awards dinner at the Four Seasons hotel in Hong Kong on February 2. If you would like to book a table at the event, please contact Amber Gordon at [email protected].

For the rest of our awards, please visit these pages:

House awards, day 2
Best deals
Best country deals



Citi has had one of its most successful years on record in Asia. Highlights included the bank leading 15 initial public offerings in China, the busiest 12-month period in its history, boasting total deposits and assets under management that top all-time highs of $240 billion and $190 billion respectively, adding close to 100 of its new smart banking branches and opening 20 China desks across the world.

These investments are behind the bank’s 10% increase in revenues to $11.7 billion for the first nine months of 2011, which have generated around 35% of global profit. Global transaction services (GTS) was a standout performer and is now the largest business globally for Citi by profit.

The consumer bank had another strong year that included positive operating leverage in the most recent quarter. The corporate bank reported that revenues were up some 20% and the bank’s global subsidiaries business — which banks close to 90% of the Fortune 500 — also reported strong growth.

Citi’s sheer reach — it has a platform across 18 markets — helped it stand out this year. Or as CEO Stephen Bird put it: “We have a model for all seasons.” With revenues of $1 billion in eight markets and a split of 32% retail, 21% cards, 29% securities and banking, and 18% GTS, Citi has a balanced business that continues to out-gun regional rivals that make the bulk of their Asian profits from Hong Kong and in some cases are exiting parts of Asia.


Goldman Sachs

The best investment bank award typically goes to a bank that stands out as either the best equities house or the best M&A house and has strong positions in FIG, GIG, TMT and real estate. This year is no different. Goldman Sachs won the Best Equities House award on the strength of its leadership in bringing the year’s landmark deals to market, including the IPOs of Prada, Chow Tai Fook Jewellery and HKT Trust. The US firm was also very much in the running to win the Best M&A House, and worked on award-winning deals such as the BP-Reliance strategic partnership, Hyundai Motor Group’s $4.4 billion acquisition of Hyundai E&C and Home Inns & Hotels’ $470 million acquisition of Motel 168.

In past years Goldman hasn’t always been present on the debt front, but this year it was involved in a number of high-profile deals. We gave it the nod for its work on CNOOC’s $2 billion dual- tranche investment grade bond, and also liked the high-yield bonds it brought for Country Garden and Hyva Global.

As for some of the criticisms lobbed against Goldman Sachs this year, we hear the firm’s response. Rivals argued that Goldman was not present in the equities market during the height of the market volatility in September and October. Goldman defended that decision this way: “Part of our job is to advise clients which market to jump into.” And advising clients to avoid one of the worst markets in recent years was not a bad one, at least for those clients who could afford to wait.

There were other accusations too (Goldman elicits heartfelt attacks at times). Some said that it joined transactions late, that it didn’t make the most money in 2011 and so on. We weighed those criticisms, and in some cases we took them on board. But overall we still felt that it was Goldman’s year. Despite all the mud that rival banks throw, they all tend to agree that Goldman was their biggest competitor this year — and there was no such consensus about any other bank during 2011.



At first glance it might seem that a $2.3 billion trading loss would stack the odds against UBS coming away with our top private bank award this year. But the fact that the Swiss bank has committed to making its private bank stronger and confirmed on November 17 that it is closing various investment banking businesses that put its balance sheet at risk, is testament to how critical the private banking business is to UBS — and the lengths to which it will go to preserve it.

To select the best private bank we pose a hypothetical client scenario to the contenders. Each year, the scenario builds in, albeit obliquely, the issues that have dominated headlines during the year. This year the client was setting up a charitable foundation. Wealth storage and return on capital were both of equal importance. We overlay the proposed portfolio with a qualitative assessment of the factors we feel would be valued by the client. We felt that a charity would be keen to be associated with a best-in-class private bank, which has demonstrated over time its experience and capabilities.

As usual all contenders had some standout points. As would be expected all banks were long fixed income, given the volatility in the environment and the requirement for the foundation to have a stream of steady, annual cash flows for its outlay each year. Credit Suisse made an aggressive suggestion that part of the portfolio be levered, but backed this up by providing a revolver themselves. On a standalone basis, Citi’s proposed portfolio was compelling. HSBC brought in an impressive philanthropy expert who asked all the right questions.

But in the balance UBS stood out. The team presented a balanced portfolio after giving adequate weight to all parameters. The pedigree it brought to the table, including the work it has done for some of the leading charities in the region, could not be faulted. And finally, neither could its response to the trading loss. UBS clearly stands out as the best private bank in the region — and the lead it has on its competitors in assets under management corroborates this.


Morgan Stanley

This should have been an easy decision, judging purely by Dealogic’s completed M&A league tables. Goldman Sachs is credited with advising on $64 billion of deals so far this year, while its nearest competitors, Bank of America Merrill Lynch and Morgan Stanley, have both advised on less than $50 billion.

However, when we drilled down into the deals that made up these rankings and looked at the roles the individual banks played, the field looked much closer than the league tables suggest. In our view, Dealogic’s rankings flatter Goldman. Burrowing through the deals, we concluded that Morgan Stanley had edged it, and we also noted Citi’s impressive rise, which we expect to continue into next year.

Morgan Stanley runs a traditional heavyweight US M&A business that consistently picks up mandates on some of the region’s biggest deals. In 2011, it advised BP on its $9 billion investment into Reliance in India, which was probably the most complicated deal of the year, at least in terms of the number of moving parts. It also had a good balance of deals across the region, including deals for Huawei in China, the sale of the Titleist and Footjoy brands to Fila Korea and the sale of AIG’s stake in Nan Shan in Taiwan.

But one of its most impressive deals this year was Nestle’s $1.7 billion acquisition of a 60% stake in Hsu Fu Chi, which won approval in China last week and is a landmark investment into the country.

Indeed, Morgan Stanley was present across a range of the biggest themes in Asian M&A in 2011, including consolidation among financial institutions, energy and natural resources deals, inbound investments into the consumer and retail sectors, and outbound acquisitions of foreign brands and knowhow. The league tables might not quite show it, but it was Morgan Stanley’s year in M&A.

Goldman Sachs

When we gave the Best Equity House award to Goldman Sachs last year we noted that for the first time in years it had the volume, depth and geographical breadth to be viewed as the overall best house, not just a bank that acts on behalf of select high-quality clients. This is still the case, although as the market has deteriorated and the pickup in volatility has made equity issuance an increasingly risky business, Goldman has become somewhat more conservative and also a bit more selective about what business to get involved in. This has been particularly noticeable with regard to block trades, where Morgan Stanley has pulled ahead this year. Goldman was also largely absent from the market in September and October, which it defends by arguing that it was recommending clients to wait for a better market window. And in light of the poor market performance during the past four months, we do find it difficult to fault that strategy, particularly since Goldman has been very active in November and December with leading roles on the IPOs of HKT Trust, Chow Tai Fook Jewellery and New China Life Insurance, which raised between $1 billion and $2 billion each. Or as one rival banker put it during the November pitch process: “Yes, Goldman did better in the first half, but so did the market.”

What made us side once again with Goldman is the fact that it has been on an impressive number of the most high-profile listings this year and has played a leading role on almost all of them. Aside from the three already mentioned, it also worked on the IPOs for both Prada and Samsonite, which were the two key international companies to list in Hong Kong this year; it was a bookrunner on Sun Art Retail Group, which we view as the best IPO in Asia this year, and it worked on the well-executed listing of Mapletree Commercial Trust in Singapore. Together with DBS and Deutsche Bank, it also led the listing of some of Hutchison’s ports assets through a business trust in Singapore, which at $5.45 billion was the largest IPO in Southeast Asia ever. That stock has traded badly, but aside from that we feel that Goldman’s IPO execution in general is very solid and compensates well for the fact that other banks may have been on more IPOs in terms of numbers. One example is Deutsche Bank, which has worked on an impressive 16 IPOs this year, thanks to its strong origination capabilities both in China and in Southeast Asia.

We also feel that Goldman’s year has been more balanced between IPOs, CBs and block trades/follow-ons compared to Morgan Stanley, whose franchise has been very focused on blocks this year. Morgan Stanley argues that this has helped lift its profitability in a year when IPO fees have dropped off, but one persistent comment in the past few months has been that many of its blocks have been priced too much in favour of the seller. While some of that may be gripe from rivals who are finding it difficult to keep up, we do note that even on the best of these deals investors haven’t made much money.

And Goldman has by no means pulled away from the blocks business. In fact, the $1.8 billion sell-down in China Pacific Insurance that it arranged for Carlyle in January this year was one of the most elegantly executed trades all year. It also gave Goldman the top position in Dealogic’s ECM league table that it has then hung on to all year. Other noticeable trades include a $593 million combined follow-on and sell-down in in May and a second $989 million sale by Carlyle in CPIC in July.


J.P. Morgan

Listening to the market chatter, it sounds like 2011 will be remembered mostly for the poor performance of several new CBs and for the fact that the new issue market was shut for long periods at a time. Sure, there were well-structured deals too and some attempts to push the envelope, but in the eyes of many market participants, the past year has brought little real innovation and not much excitement.

To select a top house in this kind of environment is not all that easy. Arguably, our two runner-ups have had a good year and deserve a mention: Credit Suisse has churned out more deals than anyone else and played a lead role on most of them, while Goldman Sachs has brought big issues and tops the league table in terms of deal value. However, the majority of Credit Suisse’s transactions have been quite small and some of Goldman’s bespoke solutions worked mainly for the issuer. Both banks were also on San Miguel’s concurrent follow-on/CB transaction, where the CB looked more like a rescue tool than a franchise-defining print.

So, our choice falls, once again, on J.P. Morgan. The bank has brought a series of well-executed deals that traded up after pricing, and while it wasn’t on the biggest deals it delivered trades that worked for both issuers and investors.

One of the criticisms thrown at it by rivals is that some of J.P. Morgan’s bonds traded up a bit too much, suggesting that the pricing was too generous towards investors, but at times of high volatility and lots of headline risk, it is hard to fault something that also provides certainty of execution for the issuer.

Among its key deals was a $400 million CB for TPK Holding, the main supplier to Apple’s iPhones and iPads, that it led together with Nomura. It also introduced a new class of issuer to the equity-linked market as it helped two separate unlisted Chinese SOEs (GDH Limited and Tsinlien) to sell bonds exchangeable into Hong Kong-listed entities. Both deals were viewed as nice trades at the time.

Importantly, J.P. Morgan was the sole bookrunner on five of its seven deals, which not only shows that issuers are comfortable with its ability to execute, but also supports the bottom line. On that topic, we are also hearing that J.P. Morgan has done a very good job with its trading book this year and has made money even as CB prices has come under pressure.


Credit Suisse

Deciding this award is always tough because most banks that have a dedicated focus on the mid-cap space tend to operate in one or two markets only, while the international houses treat mid-cap as an integrated part of their overall ECM franchise. The latter is particularly obvious this year as four banks are almost tied at the top of the Asia ex-Japan mid-cap IPO league table, having done five or six deals each. And differentiating between them was made even tougher by the fact that smaller stocks have been hit particularly hard by the volatility in global stock markets and the drop in risk appetite during the second half. As a result, many of this year’s mid-cap newcomers are currently trading well below issue price.

In the end, our choice is Credit Suisse. The bank has brought to market a nice selection of mid-cap companies from China, Malaysia, Indonesia and India and the deals have been generally well-structured and well-priced for the environment. One of its IPOs, for iron ore miner China Hanking Holdings, was even largely covered at launch to ensure it would get done. Thanks to this approach, Hanking was able to successfully raise $148 million in September even as numerous other deals were getting pulled, and as of mid-December it was still trading around issue price. Other well-received IPOs brought by Credit Suisse this year include Chinese tea retailer Tenfu, Malaysian shopping-mall operator Pavilion Reit and Indonesian mobile phone retailer Erajaya.

But we are also impressed by how Credit Suisse has used its strength in convertible bonds to help mid-cap companies raise capital. Notable examples are US-listed Renesola and Jinko Solar, which were able to raise $200 million and $125 million respectively even though share prices in the sector have fallen significantly this year. For these companies, selling new shares would have been virtually impossible. It has also helped arrange CBs for Hong Kong-listed China Huiyuan Juice and for Osim, a Singapore-listed retailer of massage chairs and other lifestyle products.



HSBC took a near clean sweep of the awards this year thanks to its unprecedented dominance in both the G3 and local currency markets. This year, it pulled out all the stops and drew sharply ahead with a market share of 12.5% for Asia ex-Japan G3 bonds. This was a sweeping margin over its nearest rivals, Citi and Deutsche Bank, which had market shares of 8.7% and 7.5% respectively, according to Dealogic.

Previous criticisms levelled against HSBC have been that it focuses too much on bland vanilla transactions. More boring and less sexy, its rivals have scoffed in the past.

However, this year, the bank’s debt business reflected both breadth and diversity. It picked up its game in sub-investment bonds and continued to power ahead in the investment-grade space, where it is traditionally strongest.

Noteworthy transactions included marquee debut bonds for Pertamina and real estate developer Longfor (on the high-yield side). The bank also proved its structuring capabilities with a handful of corporate hybrids, the most noteworthy one being Citic Pacific’s --on which it acted as joint bookrunner with UBS -- which helped re-open Asia’s hybrid market. Another market re-opening trade that HSBC was involved in was Korea National Oil Corp’s bond in October. Amid volatile conditions in 2011, a number of sloppily executed transactions were brought to market and on this front, HSBC avoided many of the missteps made by its rivals.

HSBC’s dominance in the G3 markets was also reflected in the sovereign bond league tables. The bank’s Islamic financing skills helped it pull ahead of traditionally strong sovereign houses such as J.P. Morgan. It acted as a bookrunner on five of the seven Asian G3 sovereign deals, putting it slightly ahead of Citi, which had completed four deals.

As Asian countries have brought more interesting deals to their local currency bond markets, it has further allowed HSBC to shine in the sovereign space. Notably, it was the only foreign bank on Thailand’s Bt40 billion ($1.3 billion) inflation-linked bond and it was also a global coordinator on China’s Ministry of Finance multi-tranche dim sum bond.

In the offshore renminbi space, HSBC was ahead of its closest rival by quite a stretch. It had a market share of 20.2%, roughly double that of Standard Chartered, which had a 10.4% market share according to Dealogic. Its dominance in that space is clearly testament to the strength of its relationships and franchise in Hong Kong.

Although the bank attracted criticism from rivals who said its dim sum volumes were generated by its ability to “book” some of these deals, this was robustly rebuffed by HSBC during the pitch process.

Notwithstanding this, the fact remains that HSBC’s dim sum franchise has a diversity and breadth that is unrivalled by its peers. Its dim sum coverage includes a mix of Chinese state-owned enterprises and an impressive number of multinational companies.

It played lead roles on high-profile dim sum deals such as ICBC Asia’s sub-debt and the largest corporate dim sum for Baosteel and CNPC. HSBC’s deal roster for multinational companies was equally impressive and included names such as BSH Bosch and Siemens Hausgerate, Tesco, Air Liquide and BP, which all contributed to the market’s diversity.

Finally, in the local currency bond space, it was a two-horse race between HSBC and Standard Chartered. However, this year, HSBC succeeded in improving its market share, raising an impressive $12.4 billion for 148 borrowers giving it a market share of 2.8% versus Standard Chartered, which raised $9.3 billion for 191 giving it a 2.1% market share.

The bank also delivered more cross-border Asian local currency transactions, chalking up $6.1 billion in local currency bonds versus Standard Chartered’s $1.5 billion, according to Dealogic. This suggested that the bank was offering clients solutions to achieve the best cost of funding in different currencies. Overall, we also feel that HSBC brought forward more impressive deals. This included Thailand’s inflation-linked bond, a high-profile mandate that it managed to wrest from the grips of Standard Chartered and Deutsche Bank.


Deutsche Bank

Deutsche Bank wins the best high-yield bond house award for the second consecutive year. The bank ended 2011 second in the league tables with a market share of 11%, having raised $1.75 billion for 11 issuers, putting it slightly behind Citi, which raised $2.1 billion for 12 issuers, according to Dealogic data.

Despite the slight edge Citi had in terms of volume, Deutsche Bank differentiated itself in a number of ways. Earlier than anyone else, it identified high-yield investors’ desire to diversify away from the China real estate sector and it also brought the most number of debut borrowers to market.

This included a $500 million high-yield bond for Winsway Coking Coal and bonds for Texhong Textile and West China Cement. It played either a sole or lead role in many of these deals, highlighting the bank’s distribution capabilities. The bank was also involved in debut dollar deals for MIE Holdings, China Shanshui Cement, Tata Power and Fufeng Group.

Although it missed out on Vedanta Resources’ jumbo deal, Deutsche was on a number of other big deals, including Country Garden’s $900 million bond and Evergrande’s Rmb9.25 billion ($1.4 billion) synthetic high-yield bond. It worked on a good balance of small and large transactions.

Aside from debut borrowers, clients also returned for repeat business, one example being Stats ChipPac, which mandated Deutsche for a $200 million high-yield bond on a sole basis.

While we are not discounting the work done for quasi-sovereign sub-investment grade names, we feel that Deutsche Bank as a house worked on more deals for “true” high-yield borrowers. And if its clients keep returning for repeat business, it is a clear sign that the bank is doing something right.

The bank’s structuring abilities and market intelligence were also showcased on the liability management front, where Deutsche Bank acted as a sole dealer manager on True Move’s $690 million debt tender. True was another repeat client and Deutsche knew where most of the bonds were held, giving it an advantage over its rivals. While Deutsche is seeing greater competition from the likes of Citi, Standard Chartered and UBS, we think it had an impressive year that justifies it holding on to the award.



We will announce the Borrower of the Year at our awards dinner at the Four Seasons hotel in Hong Kong on February 2.

For the rest of our awards, please visit these pages:

House awards, day 1
Best deals
Best country deals


Morgan Stanley

With the IPO spigot closed for much of the year, Asia's FIG bankers had to work harder than ever for their fees in 2011. The unpredictable market conditions made it tough to bring the mega-IPOs that have dominated the financial institutions sector in recent years, as evidenced this week when Haitong Securities chose to postpone its relatively modest $1.5 billion Hong Kong offering.

For our money, Morgan Stanley's team did the most to help its clients find market windows to raise capital and execute strategic M&A during the year's tough markets. The team's success was largely driven by a focus on block trades. Morgan Stanley was the sole bookrunner on Temasek's $3.6 billion sell-down in China Construction Bank and Bank of China in July (a month in which it helped clients to raise almost $5 billion through sell-downs), and reopened the market in October with a $296 million sell-down in Samsung Life. Besides missing a Carlyle trade handled solely by Goldman Sachs, Morgan Stanley positioned itself smartly and won a dominant position in the deal flow.

"We blew the cover off the ball in blocks," said one of the team members. And most rivals grudgingly agree with that, though one of the more creative negative campaigners tried to argue that Morgan Stanley had been too active, jamming too much paper on to investors at too tight a price. Perhaps, but we reckon that's the kind of problem most bankers would have been happy to contend with during 2011.

Blockbuster IPOs might have been thin on the ground, but Morgan Stanley did help some issuers to raise fresh equity capital, notably Citic Securities, which launched a $1.7 billion IPO in Hong Kong in September. It also advised on some significant M&A deals, such as GE Capital's sale of GE Money Singapore to Standard Chartered for $700 million, Axa's sale of a $1.2 billion stake in Taikang Life to a consortium led by Goldman Sachs and GIC, and AIG's $2.2 billion sale of Nan Shan Life Insurance in Taiwan to Ruen Chen Investment.



Citi wins this award for its balanced franchise — across technology, media and telecoms, across geographies and across M&A, equity and debt. As one TMT banker said: "You can't ignore sectors, otherwise that'll bite you eventually." And that's so true. One year it may be all about India telecoms M&A, and the next it could be China equities, but if you're not present year-in and year-out, you won't capitalise. And Citi was present across the board during 2011.

That said, this was an M&A year for TMT, and Citi stood out. Like many, it was on the biggest TMT M&A transaction in Asia in 2011, representing the sell side (the Asia side) in Vodafone's acquisition of Essar Group's Vodafone Essar stake, and it did the heavy lifting, working with Essar to evaluate its options under the shareholders agreement that Citi helped put together in 2007, finally arriving at an exercise of the full put option.

It was also the sole sell-side adviser on PLDT's acquisition of Digitel, which was the largest ever M&A transaction in the Philippines. While this may have been a transaction dreamt up by the two parties involved, Digitel turned to Citi to make the deal happen and achieved one of the highest valuations in the industry in recent years.

But we also appreciate that Citi helped lead continuing consolidation in IT services, semiconductors and even traditional media, working on 12 mid-cap M&A transactions, which in the tech world is where the foundation for the future can be found. And Citi spotted the China internet growth trend: doing one of the year's best IPOs for Qihoo 360, as well as Tencent's strategic investment in Kaixin. Citi brokered the deal and acted as sole financial adviser to Kaixin, despite three original bookrunners on Kaixin's planned IPO.

While debt wasn't the key story for TMT in 2011, Citi was present on this front as well, with acquisition financing for Genpact, Trans and Melco, and bonds for LDK Solar, ASE, Melco and KT proving it had a well-rounded franchise.


Goldman Sachs

As always, this was a tough award that gave rise to lengthy discussions in our conference room. Our top contenders all worked on several nice transactions — in fact, some of them worked on the same nice transactions — and they all had a good story to tell about their significant achievements during the year. But given the challenging market environment most also had one or two deals on their list that didn’t look too rosy, and with so many sub-sectors included under the GIG umbrella, it is hard to make direct comparisons between different franchises.

The league tables were of little help as the difference between the top houses is so minor that it really doesn't matter, especially when you factor in the number of deals they have worked on. And, frankly, if that was to be the basis of our decision we might as well have skipped the lengthy discussions.

In the end we picked Goldman because, aside from having executed a broad range of transactions across the sub-sectors — as have Morgan Stanley and UBS — it has been involved in many of this year's biggest and most significant deals. It is particularly strong on the equity side, where it was a global coordinator on the IPOs for both Prada and Samsonite, which were the two key international companies that listed in Hong Kong this year. It followed this up with a key role on the IPO for Chow Tai Fook Jewellery late in the year. It also worked on the largest energy IPO for Huaneng Renewables, the biggest-ever healthcare IPO in Asia for Shanghai Pharmaceuticals, and led a $3.5 billion A-share CB for Sinopec.

On the M&A side it worked with Reliance on its $9 billion strategic partnership with BP and with Hyundai Motors on its $4.4 billion acquisition of Hyundai E&C, which have both won FinanceAsia deal awards this year. It also advised CNOOC on its $1.5 billion acquisition of oil and gas assets in Uganda.

And while debt isn't Goldman's strength, it continues to execute enough deals to stay relevant. Among the noteworthy deals this year are a $750 million perpetual for China Resources Power, a $300 million bond and exchange programme for Indika Energy and a Rmb1.5 billion dim sum bond for Beijing Enterprises Water.


Goldman Sachs

Goldman Sachs moved to the top of the short list for this award after two standout deals involving the Mapletree group and Swire Properties, which are both long-standing clients of the firm. In March it helped Mapletree Commercial Trust go public through the largest ever Reit IPO in Singapore — a deal that went very smoothly despite a challenging market environment. And in August it advised Swire Properties on the $2.4 billion sale of its Festival Walk mall to Mapletree Investments. Goldman was initially mandated to sell 50% of the mall, but after Mapletree expressed an interest in buying the whole thing, the bank convinced the seller to part with the lot. This netted Swire a 9% premium versus the independent valuation and took care of its capital needs after it called off an IPO in Hong Kong last year.

The US bank was also the lead sell-side adviser on Home Inns & Hotels' $470 million acquisition of Motel 168 through a competitive auction process, and helped another of its many Hong Kong blue-chip clients, Wharf Holdings, raise $800 million through a convertible bond after the company had failed to complete a bond issue. The deal attracted a lot of flak from CB specialists for the 65% premium that made it very debt-like. But while it may not stand out as the equity-linked deal of the year, it delivered a tailor-made solution that solved Wharf's financing needs.

On the debt side, it acted as a joint global coordinator for Country Garden's $900 million high-yield bond and for Guangzhou R&F's dual-tranche offering in offshore renminbi and US dollars, among other things.

It was not on Hui Xian Reit's $1.6 billion IPO, which broke new ground as the first offshore renminbi-denominated listing in Hong Kong. But because of the guidelines and restrictions on structuring, timing and pricing that were imposed both by the issuer and the regulators, that deal didn't end up being the benchmark one might have expected.

Instead, Goldman wins the award for its breadth across equity, debt and M&A and for being involved in some of the most high-profile deals in each of these categories. After three straight years with J.P. Morgan, our real estate house award has found a new home.


Credit Suisse

Credit Suisse's momentum in equity brokerage has been impressive since the financial crisis and the business has continued to do well through 2011, in contrast to the fortunes of its Swiss rival, UBS, which had been recovering some of its former sheen before a trader in London lost $2.3 billion on the bank's exchange-traded fund desk. Credit Suisse claims to have benefited from that, picking up prime broking business worldwide from UBS after the unauthorised trading loss surfaced.

Indeed, Credit Suisse now has its sights set on taking UBS's former crown. "Over the next two years Credit Suisse is hoping to be where UBS was in 2003 to 2006," said one banker, referring to UBS's dominant market position in Asia equity brokerage during the pre-crisis bull market.

However, the business has changed considerably since then. Now that proprietary trading is largely a thing of the past, banks are battling harder than ever to win access to hedge fund clients through prime broking relationships — and Credit Suisse has done well here, winning mandates on most of the major hedge fund launches during 2011 and is closing the gap to the market leaders.

In the cash business it has won market share from rivals throughout the region this year, with the number one position among foreign brokers in Hong Kong, Korea, Malaysia, Singapore, Taiwan and Thailand — and launched onshore brokerage operations in the Philippines in April. Its AES electronic trading suite is one of the leading platforms in the market, offering a host of algorithms, as well as a proprietary crossing engine and smart order routing. The bank offers research in 13 Asian markets and covers 1,200 stocks, which is more than 90% of the MSCI universe.

Finally, Credit Suisse has been upping its game in equity derivatives during the past few years, with a particular focus on building a corporate derivatives business that brings together its investment bank and its private bank.

As competition has increased in the brokerage business, Credit Suisse has responded well and maintained its momentum. And it will need to do so all over again next year.



CIMB is positioning itself as playing a pivotal role in helping Malaysia realise its aspirations to become a global leader in Islamic finance. It stood out this year by working on groundbreaking sukuk deals, such as the government of Malaysia's third US dollar-denominated sovereign sukuk, as well as the first ever renminbi sukuk, issued by Khazanah, which was 3.6 times subscribed and was upsized to Rmb500 million (from Rmb300 million) to cater to investor demand. It also boasted roughly a 23% market share of Islamic debt capital market issuance this year, according to Dealogic.

Apart from structuring and originating Islamic capital market deals, CIMB also provides liquidity in the secondary market — Malaysia is perhaps the only country in Southeast Asia where issuers can easily approach the market and obtain 20-year Islamic paper. CIMB also offers Islamic derivatives and structured investments, as well as wealth-management services, all of which gives its clients a true range of products to choose from when they are looking to invest in a Shar'iah-compliant manner. Indeed, CIMB's suite of Islamic products is extensive. One of its latest offerings: online Islamic will writing services. There is a demand for such offerings, and CIMB is determined to lead.



Citi proved to be the best cash management bank in Asia-Pacific for another year. It serves more than 54,000 global multinational and regional corporations, small and medium-sized enterprises, government entities and financial institutions for payments and 25,000 for receivables solutions, through 700 branches across 18 countries in the region. Citi has won more than 5,300 new cash management deals valued at around $265 million during the period under review and revenues from its global transaction services business are up 9% year-on-year.

Citi continued to excel on the technology front for 2011. It unveiled a new business centre in Singapore called Citi Innovation Lab to “change the game” by empowering its clients to rely less on the bank itself. The business centre highlights the importance of innovation for Citi. Citi Innovation Lab leverages new web, mobile, supply chain and analytics technologies to engage its clients. It is fully interactive and globally linked, which allows the bank to connect with its clients, colleagues and experts through direct video and voice feed for discussions on future needs and collaboration.

Other product and technology initiatives include launching a new module within its TreasuryVision portal that helps clients simplify how they manage internal lending relationships between their legal entities. Citi’s mobile solution Cash2Mobile, which was piloted in South Korea last year, was launched in China and India. In the former, Citi partnered with a local telecommunications service provider to customise a mobile solution designed for its fast moving consumer goods clients. The mobile solution streamlines collection flows and improves working capital efficiency.

Citi also expanded its commercial cards business and now provides card-based solutions to more than 300 public and private sector clients in 12 countries in the region. More notably is the shared service centre (SSC) support the bank offers to its clients. As the multinationals of tomorrow expand cross-border Citi has been providing support along the way to more than 225 multi-country SSCs in the region.



HSBC continued to maintain its position as the leading trade finance bank in Asia-Pacific for another year running. The bank’s trade and supply chain presence spreads across 20 countries and territories with more than 900 locations staffed by more than 2,300 dedicated trade and supply chain specialists. In China alone, HSBC has an impressive 100-plus trade outlets, around 15 more than last year, in 25 cities. Year to date, total trade revenues and trade turnovers are up more than 20% and 30%, respectively. HSBC remained profitable in each country and recorded double-digit growth in all nine of its strategic markets in Asia-Pacific which contribute to more than 80% of total revenue in the region. At the end of the third-quarter this year, HSBC also boasts a client base of more than 55,500 small and medium-size enterprises, middle-market and top-tier clients.

In 2011, HSBC proved to be committed to regional investment and launched a new quarterly world trade forecaster, HSBC Trade Connections. The forecaster predicted that Asia trade will be the key driver of world trade growth by 2025 with trade growth of 4.8% compared to 3.8% globally. Its highly regarded Trade Confidence Index was expanded to 21 countries globally with 6,000 regular respondents participating. It also introduced a new training programme for all its trade and supply chain relationship managers.

HSBC also showcased its innovation during the period under review. Its strong forfeiting and risk distribution model in Asia was taken global and allowed HSBC China to close its first cross-border renminbi documentary credit forfeiting transaction for a copper trading client. HSBC’s solution means the client’s Chinese customers can settle in renminbi, which gives the client an additional advantage when bidding for business. In Japan, HSBC now offers a series of documentary based renminbi-denominated import and export trade settlement and financing solutions.



Try as we might, we can find no better candidate for this award than Linklaters, once again. When we look across the universe of deals that banks pitched to us during the awards process, Linklaters' name appears as an adviser more often than any other firm. And that is the basic criteria by which we judge this award.

In a year when companies struggled to raise capital in the equity markets, there was even bigger demand for innovative financing solutions — and, as a result, there was also greater demand for sure-footed advice from trusted legal advisers. The offshore renminbi market is a good example. Linklaters has been at the forefront of helping businesses tap this new pool of liquidity through dim sum bond issuance, advising on bond issues from ICBC Asia, Sinochem and Intime, and also advised on the first offshore renminbi IPO for Hui Xian Reit in Hong Kong.

In Malaysia, where the government is trying to establish an Islamic financial market as another new pool of liquidity, Linklaters was present again, advising on the country's $2 billion sukuk.

Linklaters also advised on some of the most complex and thorny deals of the year, including the $6 billion leveraged financing provided to Vedanta for its acquisition of Cairn India, as well as its subsequent $1.65 billion high-yield bond. It represented the bookrunners on the $375 million high-yield bond used in the financing of Hyva Global's acquisition by Unitas Capital and NWS Holdings, and advised BP on its $9 billion acquisition of a stake in Reliance's offshore oil and gas fields, one of the biggest ever foreign direct investments into India.

Last year we wondered if the competition would step up this year and challenge Linklaters' strong showing in our deals of the year, but if anything the firm was a clearer winner in 2011 than it was last year. Standing tall in difficult markets is a sure sign of strength in depth, and for that resilience we commend Linklaters once again. If equity markets are open for longer next year and M&A activity picks up as expected, perhaps next year really will be a closer contest.

For the rest of our awards, please visit these pages:

House awards, day 1
House awards, day 2
Best country deals


Pertamina’s $1 billion 10-year and $500 million 30-year bond
Bookrunners: Citi, Credit Suisse, HSBC
Legal advisers: Davis Polk & Wardwell, Latham & Watkins

It is rare that this award goes to a bond deal, but with stock markets fluctuating wildly and international lenders deleveraging their books, Asia’s bond markets proved to be a valuable source of funding during 2011. The ability of a company such as Pertamina to tap international bond investors for 30-year money is no mean achievement and, in a year when debt deals came to the fore, is our pick for the defining deal of 2011.

The transaction stood out for a host of reasons. The company’s journey to the debt market lasted all of seven years and after a Herculean effort to get the state-owned oil giants’ tangled accounts in order, the company successfully tapped the international bond market twice in quick succession. Bankers on the deal compared the process to that of an initial public offering rather than a bond debut.

Each of the tranches was swiftly executed and for a debut issuer Pertamina broke new ground, issuing a rare sub-investment grade 30-year bond ahead of the Indonesian sovereign. Its successful debut transaction helped establish a liquid yield curve for the borrower, positioning it for future issuance.

The deal was perfectly timed to capture resurgent investor appetite for exposure to Indonesia. With investors expecting the sovereign to be upgraded to investment-grade status soon, the bonds attracted resounding demand to the tune of more than $12 billion of orders across both tranches. And in terms of aftermarket performance, despite volatile markets, Pertamina’s bonds have traded higher in the secondary market.

Arguably, the deal also helped transformed Pertamina’s image from an unwieldy state-owned enterprise to a business that is more professionally run, under the leadership of chief executive Karen Agustiawan, who became the first woman to head Pertamina in 2009.


BP and Reliance’s $9 billion strategic partnership
Lead financial advisers: Goldman Sachs, Morgan Stanley
Legal advisers: Allen & Overy, Linklaters, Vinson & Elkins, AZB & Partners, Talwar Thakore & Associates

BP’s oil spill in the Gulf of Mexico in April 2010 put this deal on hold for most of last year, but with a total investment of up to $20 billion at stake, it was in everyone’s interests to see it to completion.

The partnership involves BP taking a 30% stake in 21 offshore oil and gas fields in southern and eastern India owned by Mukesh Ambani’s Reliance Industries. The two companies have also entered an equal joint venture for sourcing and marketing natural gas into India, and creating the infrastructure needed to supply the gas to customers. In exchange, BP will pay Reliance $7.2 billion and up to $1.8 billion in performance payments.

That represents a big deal even for an oil major. Indeed, it is BP’s biggest ever investment into a single basin anywhere in the world, and one of the biggest foreign direct investments into India. BP’s expertise will help Reliance exploit the country’s vast but hard-to-access oil and gas reserves, which should ultimately help India’s economy become more competitive. Given the backdrop of BP’s environmental and public relations disaster in the US, as well as the history of troubled investments into India, this deal always had the potential to turn sour. Getting it across the finishing line was a considerable achievement, both for the country and for the companies involved, and one that is fully deserving of our award for the region’s best M&A deal this year.


Maybank’s $1.5 billion acquisition of Kim Eng
Lead financial advisers: Nomura, Maybank, Morgan Stanley, TC Capital
Legal advisers: Skadden Arps, Allen & Gledhill, Chandler and Thong-ek, Wong Partnership

This was a smart deal. Maybank is a top-tier bank in Malaysia seeking to grow outside of its home turf, while Kim Eng has a blue-chip reputation as a stockbroker with a leading position in Singapore, Thailand, Indonesia and the Philippines. So the acquisition, which should help Maybank achieve its stated aim of deriving 40% of its profits from markets other than Malaysia, made sense as a long-term strategic move and was destined to be a winner in our books.

However, the transaction also stood out for the professional way it was executed. The offer to buy 44.6% in Kim Eng was announced on January 6 and completed within six months, in a transaction that ranked as the third-biggest deal ever between Malaysia and Singapore, and which could contribute to stronger ties between the two countries. It then launched and successfully executed the largest general offer in Singapore in 2011, raising Maybank’s shareholding to 100%. Cross-border deals with strong and compelling strategic rationale, that are good for the growth of Asia, are precisely the type of transactions banks in the region should want to handle, and are the sort we want to award.


Hyundai Motor Group’s $4.4 billion acquisition of Hyundai E&C
Lead financial advisers: Bank of America Merrill Lynch, Goldman Sachs
Legal advisers: Bae Kim & Lee, Kim & Chang

On the face of it, one Hyundai company buying another looks like a fairly routine consolidation, but in this case, the truth could hardly be more different. Hyundai Engineering & Construction, the flagship business of the original Hyundai Group, had been under the control of nine creditors since 2001 and emerged from bankruptcy in 2006. After prolonged efforts to sell their 34.88% stake, the creditors struck gold in 2010 when two separate units of the former Hyundai empire entered a bidding war to regain control of the family’s crown jewel.

Hyundai Group won the initial auction with a bid of W5.51 trillion ($4.9 billion), but failed to prove that it actually had the funds to pay and its bid was rejected in December last year. That opened the door for Hyundai Motors (in a consortium with affiliates Hyundai Mobis and Kia Motors), which had bid W4.96 trillion. It might have been the lower bid, but it was still a rich price, representing a 64% premium to the company’s recent share price. In many ways, it was a dream bid for the creditors — Hyundai Motors paid a full price and signed the deal with very little negotiation. It was also a dream for the creditors’ advisers, Bank of America Merrill Lynch, which got a paid a fee that had ratcheted up in tandem with the inflated bid.


Sun Art Retail Group’s $1.2 billion IPO
Bookrunners: BNP Paribas, China International Capital Corp, Citi, Goldman Sachs, HSBC, Morgan Stanley, UBS
Legal advisers: Freshfields, Herbert Smith, Jun He Law Offices, King & Wood, Lee and Li

The majority of Asian IPOs this year faced a challenging market environment, including numerous cancelled deals and a poor secondary market performance by many of the IPOs that had come before them. The most successful listings, in our view, were those that skilfully navigated these circumstances to the benefit of both the issuer and the investors. And Sun Art, an operator of hypermarkets in China under the Auchan and RT-Mart brands, did just that. Or as one banker put it: “We created our own luck by signing up cornerstone investors for 40% of the deal and securing $3 billion of anchor demand.”

The latter may seem excessive for a $1.2 billion offering, but anchor interest put the spotlight on the company as an industry leader and convinced other investors that this was a stock they had to buy. When the deal closed in early July, Sun Art had amassed over $20 billion of orders from more than 500 institutional accounts and virtually all the price sensitivity had been removed. This allowed the price to be fixed at the top of the range, at a premium to its peers and at the highest valuation for a consumer IPO in Hong Kong since the financial crisis. Even so, Sun Art jumped 41% on its first day of trading and as of early December it was still up 43%, making it one of the best performing IPOs in Asia this year.

The deal did suffer a hiccup, however, when it emerged, the day before the scheduled debut, that the prospectus overstated the company’s earnings per share. The mishap delayed the debut by almost two weeks as investors were asked to reconfirm their orders. Virtually nobody dropped out, and while the deal would arguably have looked better without this error, we don’t believe that it was significant enough to overshadow an otherwise excellent transaction.


Temasek’s $3.6 billion concurrent sell-down in Bank of China and China Construction Bank
Bookrunner: Morgan Stanley

There have been several noteworthy block trades in Asia this year, but none quite as bold as Temasek’s sale of a $2.4 billion stake in BOC and a $1.2 billion stake in CCB in early July. The two blocks were marketed to investors on a combined basis and saw Morgan Stanley commit $3.6 billion of capital after having wall-crossed only a handful of accounts – a testament to its distribution capabilities and its experience in pricing blocks. The combined deal was well-timed though, as the market had been expecting, and positioning for, a slew of financial sector deals in the second half of the year and both blocks were covered in less than an hour. By getting in front of the extensive pipeline, Temasek also ensured that it would get the best possible price.

Both blocks priced above the bottom of the range, resulting in a 6% discount for BOC and 4.3% for CCB. They also closed above their respective placement prices the next day before edging lower with the broader market.

The concurrent trade is a prime example both of Morgan Stanley’s blocks business, which has been very active this year, and of its strong relationship with Temasek. And alongside Carlyle’s sell-down in China Pacific Insurance in early January, it was a block that most ECM bankers said they would have liked to be on — or at least invited to bid for.


Lotte Shopping, $903 million dual-currency CB
Bookrunners: Goldman Sachs, Nomura
Legal advisers: Paul Hastings

Despite meagre volumes, 2011 has delivered several nicely-structured and well-priced equity-linked deals, such as the dollar CBs linked to the Thai baht and the New Taiwan dollar, Posco’s yen-denominated exchangeable and Temasek’s surprise exchangeable into Standard Chartered. But our favourite is Lotte Shopping’s debut CB, which used a rare dual-currency structure to create demand tension that allowed it to maximise the size and reduce the funding cost. The deal also traded well with both tranches slightly above par in the week after pricing.

The five-put-three deal was launched with a $500 million dollar tranche, a ¥16 billion ($200 million) yen tranche, and an upsize option of $300 million that could be divided between the two tranches. The overall deal was multiple times covered with an even split between the two tranches, which enabled the bookrunners to upsize the yen portion to ¥32.5 billion ($403 million), resulting in a lower blended yield.

The CB was also well timed, coming just days after Lotte’s share price reached a record high and during a brief mid-June window that followed eight consecutive weeks of falling share prices in Asia ex-Japan. Investors liked it because of Lotte’s investment grade ratings and its market leading position within department stores and supermarkets in Korea and were happy to accept a zero coupon and a negative to flat yield on the two tranches for that exposure. The premium was fixed at 23.8%.


Puregold Price Club’s $172 million IPO
Bookrunners: HSBC, UBS
Financial adviser: Evercore Partners
Legal advisers: Allen & Overy, Paul Hastings, Romulo Mabanta Buenaventura Sayoc & De Los Angeles, Zambrano & Gruba

Mid-cap IPO candidates in any market have had a tough time convincing investors to part with their money this year, which makes Puregold’s listing in the Philippines even more eye-catching. In a country that has only a marginal weighting in regional indices and where the stock market trades less than $100 million a day, the company raised $172 million from its IPO and allocated 70% of the shares to international investors, including sovereign wealth funds. The offering was multiple-times covered despite a challenging market that saw more than $7 billion of Asian deals being postponed or delayed during the marketing period, but priced at the bottom of the range at a fairly undemanding 2012 P/E multiple of 11.8. Since the debut in early October, the stock has gained 37%.

This suggests that the company was right to listen to its financial adviser who argued as far back as 2007 that it should delay the IPO until it had achieved sufficient scale and profitability. Since then, Puregold has become the second largest and the fastest growing food retailer in the Philippines with 72 hypermarkets, supermarkets and cash and carries at the time of listing, and plans to open another 28 before the end of the year. The successful execution of its IPO, which was in fact the only internationally-distributed IPO in the Philippines this year, also makes it a worthy winner of our mid-cap deal award.


Sheng Siong Group’s $100 million IPO
Bookrunner: OCBC Bank
Legal advisers: Shook Lin & Bok, TSMP Law Corporation, Zul Rafique & Partners

While small, the IPO of Singapore supermarket operator Sheng Siong attracted the attention of investors and bankers far beyond its domestic market and the strong trading debut evoked the envy of numerous other Asian listing candidates. The deal was particularly noticeable since it launched on August 5, the very day when S&P downgraded the US and triggered a wide-spread sell-off in global equity markets.

Sheng Siong rode through the market mayhem thanks to a well-thought-out listing strategy that included marketing the company as a defensive play, complete with a promise to pay up to 90% of its net profit as dividends in 2011 and 2012.

The bookrunner also convinced the company to lower its price expectations to make it possible to bring in quality international names as anchor investors to support the deal. Five international investors – JF Asset Management, Prudential Asset Management, Kenrich and subsidiaries of Fidelity and Value Partners – ended up buying 31% of the deal and overall the IPO was 1.3 times subscribed. The shares were allocated equally between institutions and retail investors to strike a balance between aftermarket performance and liquidity. That tactic seems to have worked as the stock rose 70% above the IPO price within the first two weeks and in the past couple of months it has been hovering about 20% to 35% above the issue price.

In all, this was a highly successful listing that will enable the company to move into its next expansion phase.


CNOOC’s $2 billion dual-tranche bond
Bookrunners: Barclays Capital, BOC International, Bank of America Merrill Lynch, Citi, Goldman Sachs and J.P. Morgan
Legal advisers: Davis Polk & Wardwell, Herbert Smith, Commerce & Finance Law Office, Walkers

CNOOC’s $2 billion bond stood out as a rare double-A Chinese corporate issuance that was well-executed, well-timed and marked CNOOC’s return to the international bond market after eight years. The dual-tranche bond was the third-biggest bond from Asia’s oil-and-gas sector after two deals from Malaysia’s Petronas. It also captured a trend of Chinese state-owned enterprises tapping the offshore market amid a tightening cycle in the mainland.

CNOOC’s deal was a textbook transaction that gained traction steadily during the book-building process, with the bonds eventually pricing at the tight end of guidance. It was well distributed to high quality accounts with a particularly strong take up from US investors, which accounted for 43% and 64% of the 10-and 30-year bonds respectively. CNOOC achieved a tight spread between its 10- and 30-year bonds, which gave the borrower cheap long-term funding. In contrast to CNPC, which came to the market a few months later with its debut deal and fell short on size, CNOOC clearly delivered.

The deal was priced tightly but not so much so that it alienated investors, and the bonds traded firm shortly after pricing. Although the 10-year bonds have since widened substantially outside the issue spread, this is true of most issues that came at the start of the year.


Vedanta Resources’ $6 billion acquisition financing for Cairn India and $1.65 billion bond
Lead arrangers: Barclays, Citi, Credit Suisse, Goldman Sachs, J.P. Morgan, Morgan Stanley, Royal Bank of Scotland, Standard Chartered
Bookrunners: Barclays Capital, Citi, Credit Suisse, Royal Bank of Scotland, Standard Chartered
Legal advisers: Latham & Watkins, Linklaters, Shearman & Sterling, Talwar Thakore & Associates

Anil Agarwal’s UK-listed Vedanta Resources launched its bid for a 58.5% stake in Cairn India 15 months ago, and won its final clearance just last week after protracted negotiations with the government and Cairn India’s joint venture partner, ONGC. This uncertainty made it crucial that the financing was flexible.

Instead of simply doing an outright $6 billion syndicated loan facility as originally planned, the advisers structured an acquisition finance package that reduced Vedanta’s dependence on the bank market, provided access to cheap fixed-rate funds and allowed it to tap a variety of different investor types. The deal comprised a $3.5 billion term loan (split between two tranches, one for 18 months and one for three years), a $1.5 billion US-style bridge-to-bond and a $1 billion bridge-to-equity as part funding for the full $8.7 billion price tag.

The bridge-to-bond was taken out without drawdown through a successful $1.65 billion bond offering — Asia’s biggest corporate high-yield bond to date. Vedanta stands out as a true high-yield borrower in the sense that it is not a quasi-sovereign, sub-investment grade name. The deal crossed the line despite myriad hurdles, from negative economic surprises out of the US to concerns over the European sovereign debt crisis and headline risk surrounding Vedanta’s subsidiary Sesa Goa. By successfully completing the bond, the bridge lenders were also able to get the risk off their balance sheet and bring in a number of investors new to the Vedanta credit.


Republic of Indonesia $2.5 billion 10-year bond
Bookrunners: Deutsche Bank, J.P. Morgan, UBS
Legal advisers: Allen & Overy, Linklaters, Assegaf Hamzah & Partners, Marsinih Martoatmodjo Iskandar Kusdihardjo

While 2010 was a big year for the Philippines, 2011 felt distinctly like Indonesia’s turn to shine. The country is on the cusp of investment grade status and investors are hungry for exposure to the sovereign, providing the perfect environment for the sovereign to sell bonds.

Although Indonesia is not as fleet-footed as its rival the Philippines, being slower out the gates is not always a bad thing. Indonesia was rewarded for its patience when it closed a warmly received $2.5 billion bond, gathering a solid $6.9 billion order book.

The size of the deal is impressive — it is the biggest ever single tranche completed by the Republic of Indonesia. Also equally impressive was the tight cost of funding. Through the transaction, Indonesia secured one of the lowest new issue premiums ever achieved by a non-investment grade emerging markets sovereign. The 5.1% yield it paid was tighter than similar tenor issues from higher rated sovereigns such as Hungary, Lithuania and Croatia. Although the deal did not include a much-awaited 30-year tranche, it stood out because of its flawless execution and strong performance in secondary markets.


Thailand Bt40 billion inflation-linked bond
Bookrunners: HSBC, Kasikornbank, Krung Thai Bank, Siam Commercial Bank
Legal adviser: Baker & McKenzie

Local currency bonds do not often bring anything new to the table, so it was refreshing to see a deal that offered investors something different. As Southeast Asia’s first inflation-linked bond, Thailand’s linker certainly ticked this box. And, if imitation is the sincerest form of flattery, the architects of this deal can take satisfaction in rumours that the Philippines is said to be looking to emulate Thailand with a linker of its own.

This deal not only helped the country raise funds, but also signalled to investors that Thailand is serious about tackling inflation. The deal was marketed during the Thai elections, a typically tumultuous time for the country, and priced shortly after the Puea Thai party, led by Yingluck Shinawatra, swept into power. Despite this, the linker managed to raise Bt40 billion ($1.3 billion).

The deal also helped to further develop the baht bond market. While the structure is not new in itself, it required a substantial amount of work to educate investors who were unfamiliar with the structure. The deal also had to overcome regulatory hurdles to allow Thai insurance funds to participate. While rivals suggested the bonds were heavily placed to domestic investors, there was a decent international participation and 37.5% of the deal was taken up by foreign investors from 10 countries.


ICBC Asia’s Rmb1.5 billion 10-year non-call-five bond
Bookrunners: Bank of China, Credit Suisse, DBS, Goldman Sachs, HSBC, ICBC International
Legal advisers: Allen & Overy, Linklaters

The nascent offshore renminbi bond market has come under greater scrutiny this year with the quality of transactions and the distribution of the bonds (or lack thereof) attracting their fair share of criticism. “Everybody talks about how great the dim sum market is,” said one banker. “But there’s a lot that’s wrong about it.”

This year, there was one deal that got it right. And that was ICBC Asia’s offshore renminbi bond — a deal that may help take the market in the right direction. It was the first subordinated bank capital instrument to be placed in the dim sum market, opening a new investor base for banks seeking to raise subordinated debt. It was also the first Basel III compliant subordinated issue from an Asian bank, establishing a template for other banks in the region.

One criticism levelled by rivals is that the non-viability loss absorption clause only works with a bank like ICBC Asia, as it has the backing of its mainland parent ICBC. Still, for getting investors comfortable with the new structure and paving the way for further issuance, ICBC Asia deserves the award. The deal was also well-executed and broadly distributed among private banks, insurers and fund managers with a total order book of Rmb5 billion.


Malaysia’s $2 billion dual-tranche global sukuk
Joint lead managers and bookrunners: CIMB, Citi, HSBC, Maybank
Legal advisers: Clifford Chance, Linklaters, Albar & Partners, and Kadir Andri & Partners

The $2 billion transaction is Malaysia’s third US dollar sovereign sukuk, following previous issuance in 2002 and last year, which isn’t simply a case of more of the same, but rather a sign of how powerful Malaysia’s Islamic franchise has become on the world stage. It was, however, the first 10-year US dollar sukuk, and further reinforces Malaysia’s position as the leading issuer of international Islamic bonds. Indeed, Malaysia undertook a lengthy global investor roadshow, travelling to Hong Kong and Singapore, as well as Abu Dhabi, Dubai, Riyadh, London and New York, covering both Islamic and conventional investors. The $2 billion deal was 4.5 times subscribed, attracting an aggregate interest of $9 billion, and was distributed to 175 investors for the five-year tranche and 154 investors for the 10-year tranche. It also was credited with re-opening the Asia G3 bond markets after three weeks of no US-dollar benchmark issuance.

In comparison with Malaysia’s $1.25 billion five-year sukuk transaction last year, this one achieved a lower blended cost through a dual-tranche offering of five- and 10-years, a larger deal size and a longer tenor, as well as wider investor participation with more than 320 orders (compared to 270 in 2010), which is the sort of traction Malaysia needs to continue its promotion of Kuala Lumpur as an international Islamic finance centre.


TPG/Northstar’s $169 million acquisition of 45% of BFI Finance Indonesia
Lead financial adviser: Rothschild
Legal advisers: Cleary Gottlieb Steen & Hamilton, Milbank, Makes & Partners, Melli Darsa & Co

This quietly executed deal was the first of its kind in Indonesia — a structured M&A transaction that allowed a group of individual minority shareholders in BFI Finance Indonesia to sell their shares as a package to a strategic buyer, at a premium to the prevailing market price.

To get the deal done, TPG Capital and the Northstar Consortium first approached BFI’s independent management to win their support for a new shareholder. The managers backed the move, mainly because the company’s lack of a committed shareholder had made it difficult to win funding. However, BFI’s diversified ownership also presented a challenge to the would-be buyers — with so few large shareholders and thin trading of the stock, they had to negotiate with nine individual shareholders to get their hands on a meaningful chunk of the company. The final deal comprised a stake of 45%, for which the buyers paid close to double the share price at the time.

Rothschild played a central role in identifying both the buyers and the sellers, and helped strike a deal that involved long and complicated negotiations, ending eventually in a multi-tiered pricing structure that had to be negotiated separately with each investor. However, the effort was worth it and resulted in a deal that unlocks considerable value for BFI, paid the sellers a decent premium and gave the buyers access to an opportunity that was not readily available in the market. Since the deal, BFI’s share price has already risen well above the level paid by the buyers.


Clearing solution for IATA Thailand
Lead arranger: Deutsche Bank

The International Air Transport Association (IATA) faced difficulties with its day-to-day cash management operations in Thailand, where it works with more than 520 partner agents through the country. It was collecting payments six times a month using many different banks, payment instruments and channels before it appointed Deutsche Bank to provide it with a countrywide cash management clearing bank solution with a maximum implementation time of 90 days. IATA also needed a solution that could fulfil its payments and collections options for agents and airlines with comprehensive information and reporting capabilities.

Deutsche Bank offered a highly customised solution that centralised all of IATA’s collections and payments from its agents at more than 5,000 collection points in all 76 provinces in Thailand, requiring IATA to hold only one account with the bank. In addition, each individual agent and its subsidiaries were assigned a unique incoming payer identification to improve transparency. The implementation process was fully completed in just 60 days. With Deutsche Bank’s solution, IATA is able to efficiently collect its payments made electronically or from cash and cheque while being able to identify incoming electronic payments, eliminating the need for manual confirmations and overcoming security issues.


$350 million Structured receivables purchase solution for Reliance Industries
Arranger: J.P. Morgan

The Reliance group’s refinery division has strong and established relationships with oil majors and petroleum traders across Asia-Pacific, Europe, the Middle East and North America, and therefore product supplies are made on an open-account basis. J.P. Morgan was selected to unlock value trapped in its financial supply chain, improve working capital management, reduce days sales outstanding (DSO), lower operating costs and improve efficiency, enhance liquidity and reduce counterparty risk.

What J.P. Morgan proposed was a $350 million receivables purchase solution. The bank purchased Reliance’s open-account receivables from five buyer entities across the four regions. The solution highlighted J.P. Morgan’s risk appetite as each receivable is negotiated at an individual invoice level and the transactions are structured as a true sale, whereby Reliance is able to remove the receivables from its books and transfer the payment risk wholly to the bank. In addition, Reliance reduced its DSO from 30 days down to between five and seven days.

The solution was a landmark deal for J.P. Morgan. It was executed from J.P. Morgan’s regional office in Singapore for a Mumbai-based firm with global buyers and was so successful that Reliance may include additional counterparties in the future. To date, J.P. Morgan has discounted more than $1 billion worth of receivables for Reliance.

For the rest of our awards, please visit these pages:

House awards, day 1
House awards, day 2
Best deals


Home Inns & Hotels’ $470 million acquisition of Motel 168

Adviser to Home Inn: Credit Suisse, J.P. Morgan
Adviser to Motel 168: Deutsche Bank, Goldman Sachs and Morgan Stanley
Lead arrangers for the loan: BNP Paribas, Chinatrust Commercial Bank, Credit Agricole CIB, Credit Suisse, J.P. Morgan, Natixis, Shinhan Investment Corp
Legal advisers: Simpson Thacher & Bartlett, Skadden Arps, Fangda Partners, Maples and Calder, Shanghai Pudong Law Office, Paul Hastings

Home Inns & Hotels’ successful acquisition of rival Motel 168 made it the market leader in China’s economy hotel sector, which is poised to grow in step with the domestic tourism industry. This tidy deal involved a competitive auction process and represents a proper domestic M&A transaction between two private companies advised by international advisers, which showed how Chinese businesses are becoming more sophisticated.

The acquisition price of $470 million consisted of $305 million in cash and approximately 8.5 million ordinary shares in Home Inns. The cash portion was partially funded by a $240 million four-year term loan facility, which was a rare chance for offshore banks to fund a Chinese onshore private corporate acquisition. As a result, the deal attracted attention from global lenders eager to jump on this new trend.

Much has been made about M&A transactions involving state-owned enterprises, but China’s future depends much more on sustainable growth in the private sector — and this is just the kind of deal that will help China’s corporations to unlock value and maintain growth.


Prada’s $2.5 billion IPO

Bookrunners: Banca IMI, CLSA, Goldman Sachs, UniCredit Bank
Legal advisers: Clifford Chance, Davis Polk & Wardwell, Slaughter and May, Bonelli Erede Pappalardo, Fangda Partners, Jun He Law Offices

Prada set a new benchmark for international brands pondering a listing in Hong Kong when it completed this year’s biggest Hong Kong IPO in any sector and achieved a 15% premium to its US- and European-listed peers despite weak retail interest and the fact that most of the year’s other Hong Kong IPOs were trading below issue price.

The June deal has helped bankers keep the dialogue with other potential international issuers on track even as the global market environment deteriorated further in the second half of the year. By listing in Hong Kong, the Italian fashion designer was able to target investors who understand a China growth story and are willing to pay for it, while also attracting key global funds. Prada didn’t want cornerstone investors, but the bookrunners ensured there was plenty of high-quality anchor demand by devoting four weeks for investor education during which they met with more than 400 investors. By early December the stock was trading about 9% below the IPO price, making it one of this year’s best performing IPOs.

While we believe that the parties involved could have been clearer about certain issues related to Prada being the first Italian company to list here, specifically the capital gains tax, the IPO still stands out as the top deal in Hong Kong this year.


Petronas’s $2.1 billion sell-down in Cairn India

Bookrunner: Bank of America Merrill Lynch
Legal advisers: Clifford Chance, Amarchand & Mangaldas, Luthra & Luthra

This cleverly structured block trade came after Vedanta and its subsidiary Sesa Goa launched an open offer to Cairn India’s minority shareholders in April as part of a plan to buy up to 60% of the company from the majority owner via the open offer. The deal allowed Petronas to sell its entire 14.9% stake in the Indian oil producer without relying on the tender offer itself, which was important for several reasons: Petronas avoided paying tax on the gains and didn’t have to worry about the possibility that shares tendered in the open offer could get held up because of a delay of regulatory approvals for the entire acquisition.

The placement came at a discount to the open offer, which created an attractive arbitrage opportunity as the timing of the deal enabled the buyers to tender the shares before the open offer closed on April 30. This also made it a tempting buy for the Vedanta group. As it were, Sesa Goa bought about 70% of the chunky deal, which accounted for 106 days’ of trading volume. The price was fixed at the mid-point for a tight 1.5% discount to the latest close and a 6.8% discount to the open offer, resulting in a good outcome for all parties involved.


Pertamina’s $1 billion 10-year and $500 million 30-year bond
Bookrunners: Citi, Credit Suisse, HSBC
Legal advisers: Davis Polk & Wardwell, Latham & Watkins

Pertamina’s debut bond stood out for a host of reasons. The company’s journey to the debt market lasted all of seven years and after a Herculean effort to get the state-owned oil giants’ tangled accounts in order, the company successfully tapped the international bond market twice in quick succession. Bankers on the deal compared the process to that of an initial public offering rather than a bond debut.

Each of the tranches was swiftly executed and for a debut issuer Pertamina broke new ground, issuing a rare sub-investment grade 30-year bond ahead of the Indonesian sovereign. Its successful debut transaction helped establish a liquid yield curve for the borrower, positioning it for future issuance.

The deal was perfectly timed to capture resurgent investor appetite for exposure to Indonesia. With investors expecting the sovereign to be upgraded to investment-grade status soon, the bonds attracted resounding demand to the tune of more than $12 billion of orders across both tranches. And in terms of aftermarket performance, despite volatile markets, Pertamina’s bonds have traded higher in the secondary market.

Arguably, the deal also helped transformed Pertamina’s image from an unwieldy state-owned enterprise to a business that is more professionally run, under the leadership of chief executive Karen Agustiawan, who became the first woman to head Pertamina in 2009.


Fila/Mirae’s $1.225 billion acquisition of Acushnet

Advisers to Fila/Mirae: Nomura, KDB
Advisers to Acushnet: Morgan Stanley, Credit Suisse, Centerview Partners
Legal advisers:
Chadbourne & Parke, McDermott Will & Emery

For years, we’ve been hearing that Asian companies are interested in buying global brands. Here is a perfect example that truly represents an acquisition that should help further build a solid company in a growth market. Fila Korea, which owns the worldwide Fila brand, and Korean private equity company Mirae paired up to buy Acushnet, which owns the Titleist and FootJoy brands. This was a highly competitive bidding process that included global megabrands Adidas and Nike, as well as golf specialists such as Callaway, all salivating over the world’s most popular golf ball.

Nomura and KDB backed the Korean consortium, recognising that it had fewer potential antitrust issues than its rival bidders and was also more willing to retain the existing management team at Acushnet, which was an important factor for the target. Hats off to the consortium for recognising that Asia’s love affair with golf (the region accounts for more than 30% of global golf equipment spending) makes this the right part of the world to own an iconic golf brand. The private-public pair up of Fila and Mirae may also be a trend for the future that folks should look out for.


Bumi Armada $888 million IPO

Bookrunners: CIMB, CLSA, Credit Suisse, Maybank, RHB, UBS
Legal advisers: Clifford Chance,
Linklaters Allen & Gledhill, Kadir, Andri & Partners, Zul Rafique & Partners

Bumi Armada’s IPO was the biggest listing in Malaysia this year and marked a highly successful return to the public markets by the country’s largest provider of ships and floating platforms for the oil and gas industry. The company was privatised by Malaysian billionaire Ananda Krishnan in 2003 as he sought to restructure and grow the company without having to answer to minority shareholders.

The offering hit the market in late June when the volatility in global markets had caused numerous Asian IPOs to be withdrawn, but by positioning the company as a beneficiary of the high oil price, the bookrunners were able to create a positive buzz around the stock. They also boosted interest by locking up 23% of the deal with five high-quality cornerstone investors. Another 38% was set aside for ethnic Malay investors, which helped create a scarcity of shares for other institutional investors. As a result, the institutional tranche was over 40 times covered and attracted more than 350 accounts, allowing Bumi Armada to fix the price slightly above the mid-point, at a premium to its peers. In a clear sign of the strong demand, retail investors were not offered shares at a discount – a first for a Malaysian IPO. Even so, the share price jumped 36% on the first day and as of early December was still trading 30% above the issue price.


Atlas’s $368 million acquisition of Carmen Copper
Advisers to Atlas: Evercore Partners, BDO
Advisers to Casop: Macquarie

Before this deal, which was the biggest M&A transaction in the Philippines in 2011, Carmen Copper had become a bit of an unloved child. With ownership split between the Ramos family (through Atlas Consolidated Mining & Development) and a private equity investor (Crescent Asian Special Opportunities Portfolio, or Casop), everyone was dissatisfied. The private equity investor wanted to exit its investment and the Ramos family wanted full management control, but for two years attempts to sell the 45.54% stake, either through a direct buy-in or an IPO, had come to nothing.

Instead, Evercore pitched an elegantly simple idea that pleased everyone — Atlas could raise capital by selling a stake in itself, and use the proceeds to buy out the private equity in Carmen Copper. This was carried out through the sale of $390 million of shares and convertible bonds in Atlas to BDO and SM Investments, which funded a $368 million cash payment to Casop in exchange for its full stake in Carmen Copper.

The result was that Casop exited its investment with a 456% return, the Ramos family gained full control of Carmen Copper and Atlas’s share price surged by 30% in the month after the announcement.


Cheung Kong Holdings’ S$500 million senior perpetual
Bookrunners: DBS, J.P. Morgan
Legal advisers: Clifford Chance, Allen & Gledhill, Baker & McKenzie, Maples and Calder

Cheung Kong Holdings’ perpetual stood out this year as Asia’s first ever corporate senior hybrid, but it also earns recognition as an innovative solution that was neatly tailored to meet the borrower’s requirements and ensure the lowest cost of funding. The deal also further burnished Cheung Kong’s reputation as a shrewd and innovative borrower.

The company clearly took advantage of arbitrage opportunities offered in the Singapore dollar bond market, where rates are hovering near historical lows, but it offered enough yield pick up for investors to bite. The perpetual was considered by many to be a “true perpetual” in the sense that there is no coupon step-up or reset, which incentivises the borrower to call the bonds. These were both issuer-friendly features.

As Cheung Kong Holdings’ senior perpetuals are likely to be treated as equity by its lenders, which is not applicable to every borrower in Asia, there may not be a flurry of senior perpetuals in the wake of this deal. However, it was an attention-grabbing deal and added further depth and diversity to the bond market in Singapore. The bonds also performed in secondary trading despite volatile markets.


Sri Lanka’s $1 billion 10-year sovereign bond
Bookrunners: Bank of America Merrill Lynch, Barclays, HSBC, Royal Bank of Scotland
Legal advisers: Milbank

The best Sri Lanka deal award goes for the second consecutive year to the government’s latest bond issue. Few other contenders can stand up against the sovereign, which has continued to lead the way. The country’s recovery story clearly resonates with investors, who continue to show strong demand.

While this is not its 10-year debut, the bond nonetheless further establishes the sovereign’s following among global investors and creates a pool of liquidity it can tap in the future, bringing it closer to its more seasoned peers, the Philippines and Indonesia.

Its ability to raise $1 billion of cash amid volatile markets is testament to how far Sri Lanka has come since ending its civil war. It also contrasts sharply with the experience of its embattled European peers. Sri Lanka paid a competitive 6.25% coupon for its 10-year bond and about 40bp less on a spread basis than previously. Sri Lanka’s sovereign bond was also well-timed to take advantage of a ratings upgrade from Fitch to BB- from B+. While the country devalued its currency by 3% after the bond issue — which some said had a psychological effect on investors — it is worth pointing out that the bonds were still holding up above par in December.


China Steel’s $826 million GDR
Bookrunners: Credit Suisse, J.P. Morgan
Legal advisers: Simpson Thacher & Bartlett

While the largest equity offering in Taiwan since October 2007, it is not the size that makes this late July deal interesting. Rather, it is the fact that it was executed as an accelerated bookbuild overnight, allowing it to be marketed at a discount versus the latest close. This sets it apart from most other Taiwan GDRs that tend to bookbuild over a few days and against a live price. Thanks to this, the company avoided the typical dip in the share price after launch and the discount was kept at a tight 4.5% to the latest close. It was also able to time the deal to coincide with a positive momentum in overseas markets. However, the market did know that it was coming: the management had met investors during a three-day roadshow the previous week and the share price had come off somewhat after the deal was flagged through a regulatory filing in June.

That said, investors responded well to the accelerated deal, and significant interest from anchor investors ensured the order books were covered shortly after launch. The demand was price sensitive, however, and while the deal was upsized by 8% the price was fixed at the bottom of the indicated range. But the share price gained 1.5% the day after the deal and added 3.3% in the next 30 days — significantly outperforming a 15% drop in the broader Taiwan market.


Thailand Bt40 billion inflation-linked bond
Bookrunners: HSBC, Kasikornbank, Krung Thai Bank, Siam Commercial Bank
Legal advisers: Baker & McKenzie

Thailand has been a quiet market for equities during the recent political turmoil, whereas the country’s debt markets have proven to be resilient — so it is perhaps not surprising that this year’s deal award should go to a bond.

However, Thailand’s inflation-linked bond stood out in its own right. It was the first linker in Southeast Asia and not only helped the country raise funds, but also signalled to investors that it is serious about tackling inflation. The deal was marketed during the Thai elections, a typically tumultuous time for the country, and priced shortly after the Puea Thai party, led by Yingluck Shinawatra, swept into power. Despite this, the linker managed to raise Bt40 billion ($1.3 billion).

The deal helped to further develop the baht bond market. While the structure is not new in itself, it required a substantial amount of work to educate investors who were not familiar with inflation markets. The bond also had to overcome regulatory hurdles to allow Thai insurers to participate. While rivals suggested the bonds were heavily placed to domestic investors, there was a decent international participation and 37.5% of the deal was taken up by foreign investors from 10 countries.


$1.5 billion financing of Mong Duong II Power Project/AES & Posco Power

Lead arranger: Standard Chartered
Bookrunners: BNP Paribas, China Investment Corporation, Credit Agricole, DZ Bank, HSBC, ING, Mizuho, Natix, SMBC, Societe Generale, UniCredit
Legal advisers:
Freshfields Bruckhaus Deringer, Paul Hastings, Latham & Watkins, Shearman & Sterling, YKVN

Thanks to foreign financing, an important power plant project is underway that should help Vietnam develop its industries further. This deal represents both a significant step toward permitting more foreign investment into Vietnam and a step toward developing the nation’s economy. AES and Posco closed a $1.5 billion long-term loan for its 1,200MW Mong Duong II coal-fired power plant. In a broadly syndicated financing, 12 commercial banks and two Korean government export credit agencies took part in the transaction. Now AES holds a 51% equity ownership interest in the project, while a subsidiary of Posco Power and a unit of China Investment Corporation hold 30% and 19%, respectively.

It is the country’s biggest private sector power project and was handled under Vietnam’s build-operate-transfer regulations. On completion, AES became the first independent power producer to reach financial close in Vietnam since 2003. Or as one banker put it: “It’s a deal that shows Vietnam may be ready for sensibly priced infrastructure financing, which it so desperately needs.” Unfortunately, the reason for the long gap between deals is the consensus-driven way that the Vietnamese order their affairs — until that changes, expect such projects to take time.

¬ Haymarket Media Limited. All rights reserved.
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