In a tough enviroment Barclays breaks into the Singapore market
In 2002 BA Asia won the mandate to arrange a S$500 million ($280 million) three year fundraising for Singapore Technologies Holdings. This deal struggled through syndication and was eventually pulled in the early part of 2003.
Banks shied away from the tight pricing offered on the credit - just 48bp at the top level. This made it all the more surprising when Barclays sent out invitations for a $300m five year loan for ST Treasury services in May.
Market observers questioned the validity of the new deal, especially considering the pricing was only a shade above the earlier transaction at just 52bp all-in for a longer tenor. In addition they suggested that the impact of Sars in Asia on an already struggling Singapore loan market was likely to impede syndication.
Not all bankers, however, expressed such scepticism over the financing as many agreed that there were differences between the two deals that made this facility more attractive. Furthermore the very absence of new transactions in the market - just $700 million worth of loans had been signed by the beginning of May - was bound to ignite some interest among Singaporean bankers.
The borrower's directives were to achieve an aggressive pricing benchmark while regaining credibility following the collapsed BA deal. To achieve these goals the pricing was left constant while all other facets of the syndication were examined to tailor the transaction to these requirements.
Barclays first step was to offer a tight security package with a number of covenants attached including consolidated interest cover, minimum net worth and gearing ratios. This is something that is not normally associated with Temasek linked entities who have depended upon name lending in the past.
The British house also structured the facility to include a guarantee from the group head. This again was breaking away from traditional structures, and it provided further comfort to lenders as the nerve centre of the operation was backing the deal.
Finally the facility was denominated in US dollars rather than Singapore dollars. This countered any funding issues that may have arisen for foreign banks lending in the domestic currency.
A five strong group of banks were signed up pre-general including BNP Paribas, Credit Lyonnais, Credit Agricole, ING and SG. These joined as equal status arrangers - a level not offered on the original facility.
Syndication was hit with a blow when C2C - a joint venture between a group of Asian Telco concerns including SingTel - collapsed on massive unsold capacity of its network. While the credits are from totally different spectrums, market confidence took a further knock after the Sars crisis earlier on in the year.
Despite this threatening to derail the loan, Barclays was able to attract commitments from five further banks with contributions totalling $90m. This was especially encouraging given that no domestic banks joined due to exposure aggregation issues.
Proceeds partly refinanced a bridge that was put in place by Barclays in December 2002.
MAS names sustainability head; Malaysia’s EPF appoints COO and CFO; GIC PE head for SEA leaves; State Super hires new exec; Hesta appoints chief growth officer, chief Debby Blakey appointed to corporate governance board; ex-BlackRock exec joins IQ-EQ in Singapore; HSBC AM builds direct real estate team; ex-Vanguard head of distribution joins LGIM; Sanne names Singapore head; and more
Kwap property arm appoints CEO; VFMC names new CEO as Lisa Gray retires; MSIG Singapore promotes Mack Eng as CEO; Monroe Capital opens first Asia office in Seoul, hires head from Aberdeen; Vanguard Australia appoints new MD to relocate from US; HSBC AM expands EM debt team; Vantage FX hires from CGS-CIMB in Singapore; and more.
Huge cuts in emissions from real estate assets will be essential to reach net zero carbon by 2050. Columbia Threadneedle Investments’ carbon neutral real estate approach has been established for over a decade and offers major benefits for all stakeholders.
The AU$85 billion ($61.6 billion) Australian super fund has some exposure to indebted property developer Evergrande. Meanwhile, China’s construction finance is part of its core strategy in real estate.
EISS Super hit by another scandal; China's CSRC launches consultation on disclosure requirements for new BSE securities; Hong Kong issues consultation paper on Spacs; New World Development partners with China Taiping to focus on Greater Bay Area projects; GPIF employees say Japanese Reits have grown more attractive; Taiwan's BLF invites bid for $1.7 billion mandate; and more