Syndicated lending in Asia, outside of Japan and Australasia, plummeted to a seven-year low in 2020 on the back of subdued deal flows due to the disruption in the global economic activity brought about by the Covid-19 pandemic. Figures provided by Refinitiv, a LSEG business, show the volume fell 7.4% to US$374.69 billion from US$404.79 billion in 2019 – the lowest since 2013 when the volume amounted to US$365.86 billion.
But despite the declining trend, several banks remain focused, launching loan syndication transactions amid the coronavirus-induced market volatility. At the time when many lenders are scaling back their appetite, they continued to underwrite and bring their clients to the loan market for their funding requirements – thus earning the nomination for The Triple A Best Loan Adviser award.
Bank of China (BoC) leads the nominees with its syndicated finance franchise covering a swathe of activities. Refinitiv figures show that in 2020 it accounted for a 16.7% share of the loan syndicated market in Asia, outside of Japan and Australasia, up from 13.2% market share in the previous year. And in the year the loan volume was trending down, BoC, as a mandated arranger, recorded a bigger volume of US$62.47 billion, against US$53.30 billion in 2019. The bank was a lead manager in the 22 billion yuan syndicated loan for Visionex and a mandated lead arranger and bookrunner in the US$1.2 billion term loan facility for GLP China Holdings.
Citi delivers a range of financings across a diversified spectrum of industries and regions, providing a US$1.1 billion bridge facility for Yageo Corporation of Taiwan to acquire a US-listed capacitor technology company KEMET Corporation, in which it acted as the sole lead arranger and bookrunner. It was a joint coordinator, mandated lead arranger and bookrunner in the US$1.2 billion term and revolving credit facilities for Xiaomi Corporation of China. Citi coordinated the whole execution in the financing of Novelis’ acquisition of Aleris amounting to US$2.275 billion – the largest outbound acquisition by the Aditya Birla Group since 2008 and the largest US dollar transaction in the past six years.
Another nominee is Credit Suisse, which is strong in M&A-related financing and brought new borrowers into the market on a sole basis. The debut borrowers include Hope Education Group (US$250 million senior term loan and revolving credit facility), Chindata Group (US$225 million term loan), Envision Energy (Hong Kong) (US$150 million term loan) and Eddingpharm Group (US$220 million senior term loan). Credit Suisse was also involved in sovereign financing and in frontier markets in 2020, arranging deals for the Ministry of Finance of the Lao People’s Democratic Republic (€207 million) and Ministry of Finance, Government of Pakistan (US$115 million).
DBS, as a regional bank, punches above its weight among the nominees. It was the sole mandated lead arranger and bookrunner/underwriter in the S$4 billion bridge loan facility for Singapore Airlines to support the company at the height of the Covid-19 pandemic. It was a mandated lead arranger and bookrunner in the US$331 million bridge loan facility for Centratama of Indonesia to support an acquisition of telecom towers. But what makes DBS a standout was its involvement in sustainable loan financing, which resonated in 2020. According to Refinitiv, the total volume of green loans issued in Asia, outside of Japan and Australasia, rose 41.2% to US$12.70 billion in 2020, compared with US$8.99 billion a year earlier. DBS topped the league table with US$1.985 billion, or more than twice the volume of Standard Chartered, another nominee for the loan adviser award, which tallied US$702.7 million.
HSBC has a broad geographical footprint in the region and has cross-border capabilities in arranging loan syndication transactions. It brings debut borrowers into the loan market and it is a leading loan house for mid-cap borrowers. The bank was a coordinator and mandated lead arranger and bookrunner in the US$1.29 billion term loan facility for Lufax Holding, which was executed within a narrow window amid the outbreak of Covid-19 in March 2020. It was the sole coordinator and mandated lead arranger and bookrunner in the US$1.1 billion term and revolving credit facilities for Yanlord Land Group. Another marquee deal for HSBC was the HK$35 billion Equator Principles-compliant term and revolving credit facilities for Airport Authority Hong Kong in which it also acted as coordinator and mandated lead arranger and bookrunner.
Standard Chartered was another significant player in the loan syndication market across the region amid the pandemic. It helped arrange the US$1.295 billion loan for Trip.com when China imposed a lockdown. In Indonesia, it was involved in the US$1 billion borrowing by Bank Rakyat Indonesia, which attracted 23 banks, and in the dual-currency (US$90 million and €593 million) senior facility for PT Trans Retail Indonesia to help refinance its existing indebtedness. Over in India, Standard Chartered was an original mandated lead arranger and bookrunner, as well as underwriter in the country’s largest leveraged buyout loan of US$600 million for Baring Private Equity Asia’s buyout of IT solutions provider Hexaware Technologies. Its green loan credential included a US$250 million sustainability-linked loan for Olam International.
Sumitomo Mitsui Banking Corporation (SMBC) also maintains a strong presence in the loan syndication market and leverages on the yen loan market to enable borrowers to access an alternative pool of liquidity. One of the deals that defined its loan franchise in 2020 was the US$2.05 billion equivalent term loan facility for PT Indofood CBP Sukses Makmur to finance the acquisition of Pinehill Company. Acting as the sole coordinating mandated lead arranger and bookrunner of the deal, it structured the facility in US dollar and yen, which provided cost savings from lower yen rates. SMBC also brought Indian borrowers into the yen loan market, including NTPC, Mahindra & Mahindra Financial Services, and Indian Railway Finance Corporation.
Who deserves to win the Best Loan Adviser award?
As per tradition, The Asset will announce the winners of these categories in an Oscar-style awards event with the official announcement taking place live on the 18th of March 2021 starting at 5pm Hong Kong time.