PAKISTAN

Deal: PMCL ECA long-term loans with E/Rs & $/Rs currency swaps

ABN AMRO and Citigroup were lead arrangers.

When mobile phone operator Pakistan Mobile Communications (PMCL) sought a long-term funding solution for its fast-growing capex roll-out, it required foreign currency to pay equipment suppliers. However, with the company’s main revenue streams in local currency, a hedging structure was required to attract foreign currency funding from the Export Credit Agency (ECA).

In the absence of long-term traded markets, ABN AMRO and Citigroup structured the hedge as a long-term (seven-year) cross-currency swap matching ECA repayment.

In providing PMCL with long-term financing solutions, this deal has opened up the external financing market for Pakistan-based clients.

The deal facilitated the largest private sector financing in Pakistan in 2005 and the largest cross-border structured deal into Pakistan in the past decade.

PERU

Deal: Telefonica del Peru 745m new sol senior notes

Citigroup was sole lead manager and bookrunner.

In a market where local currency bonds are particularly rare, this exceptional deal has created several records. It is the first Peruvian unsecured corporate bond issue in the international capital markets, the first Euro-sol bond offering and the second largest single issuance of Peruvian new sol-denominated bonds.

Telefonica del Peru (TDP) is the first subsidiary of Spanish telecom group Telefonica to issue in the international capital markets in its local currency without a guarantee from the parent company.

The issue also introduced the TDP credit to a new investor base, allocating 73% of the offer to US and European-based investors. The strong indications of interest received meant that the issue was doubled and enabled TDP to tighten the pricing to 8%.

PHILIPPINES

Deal: Manila Water Company $98m IPO

UBS was sole international underwriter and bookrunner with BPI Capital as domestic lead underwriter.

Water provider Manila Water’s IPO was the first international issue from the Philippines in seven years. Given international investors’ relative unfamiliarity with the Philippine market and the domestic regulatory structure, the offer was an exceptional achievement. It generated interest from investors in 120 countries – ending with the book 15 times oversubscribed – and was priced at the top end of the marketed range.

POLAND

Deal: Bioton pre-IPO financing, zloty 44m IPO and acquisition of 24% stake in SciGen

CA IB acted as sole global co-ordinator for the IPO and advised on the acquisition.

With a complex three-stage financing, the transaction enabled Polish biotechnology firm Bioton to fund expansion of its production facilities through the pre-IPO financing and the subsequent IPO. It also allowed purchase of a strategic investment in Singapore based insulin merchandiser SciGen and a gateway to the promising Chinese insulin market. Given the limited access to debt facilities that Bioton had, CA IB invested in the pre-IPO financing and envisaged a possible exit via post-IPO public markets. The exit was carried out via accelerated bookbuilding and was more than four times oversubscribed. Subscriptions were taken up equally by Polish and international investors.

PORTUGAL

Deal: Espirito Santo Financial Group €500m SWInGS offering

Lehman Brothers acted as sole manager for the transaction.

This innovative deal, comprising 10,000 call warrants with an exercise price of €50,000 stapled to €500m senior fixed-rate step-up coupon accreting ‘usable’ notes due in 2005 in the form of a stapled warrant and income-note guaranteed securities (SWInGS) convertible unit, achieved a considerable number of firsts. It was the first equity credit-driven bond-plus-warrants structure in Europe. It was also the largest primary convertible in 2005, the longest dated convertible ever in Europe and the first step-up coupon convertible in Europe. Furthermore, the (SWInGS) structure, which explicitly incorporated in legal form the embedded instruments in a convertible, enabled Espirito Santo Financial Group to receive 25% pure equity credit from rating agencies. The market showed a strong interest in the issue and, with a demand in excess of €1.5bn, the deal size increased by 20%.

QATAR

Deal: QatarGas II $3217m project financing

RBS, ABN AMRO, GIB, SMBC and Qatar National Bank were bookrunners.

The QatarGas II project was groundbreaking for its size, its financial and contractual structure and its successful distribution to the international, regional and local markets. It represents the largest project finance transaction in the Middle East.

The financing solution backed the development of a two-train liquefied natural gas (LNG) project for the production and supply of LNG to the UK market. The project was jointly developed by ExxonMobil and Qatar Petroleum. QatarGas II presented a fine balance of flexibility and attractive pricing for the sponsors and strong and robust cashflow with structural mitigants for the lending banks. Part of the financing was raised from the general syndication market, mainly from new investors who had not undertaken Qatari projects previously.

RUSSIA

Deal: OJSC Sistema $1557m IPO (including green-shoe)

CSFB (now Credit Suisse) and Morgan Stanley were joint bookrunners.

Russian consumer services company OJSC Sistema’s IPO in London and Moscow was the largest IPO out of Russia and among the largest UK listings. The company’s complex business, including telecoms, real estate, banking and media, and the perception of Russia risk were challenges to be overcome. But clever marketing and good disclosure attracted investors and generated $4bn of demand.

The IPO was broadly distributed to generalist pan-European and US funds, telecom specialists and hedge funds beyond dedicated emerging markets buyers. The issue was priced at $17 and closed on the first day of trading at $17.45, or 2.6% higher, demonstrating good pricing accuracy.

SAUDI ARABIA

Deal: Yanbu National Petrochemical Company (Yansab) SR1969m IPO

Samba was financial adviser and lead manager.

Petrochemical company Kanab’s IPO is the first in a series of petrochemicals IPOs and projects planned in Saudi Arabia. The IPO was executed in a record three weeks, against the usual four to six months for offerings in the country.

The deal is the first IPO in the petrochemical industry since the announcement that Saudi Arabia would be joining the World Trade Organisation and will enable growth for Yansab and its parent, Saudi Basic Industries Corporation, the seventh largest petrochemical manufacturer in the world.

SINGAPORE

Deal: Avago Technologies’ $1bn three-tranche global bond offering

Lehman Brothers, Citigroup and CSFB were joint bookrunners.

At a time when several other high yield bonds were postponed because of unfavourable market conditions, Avago technologies’ bond offering helped revive the Asia high yield market with the largest offshore bond deal by a high yield Asian corporate issuer. It was also the largest ever corporate high yield bond offering out of Asia.

The transaction was part of the largest semiconductor LBO and second largest US technology LBO in history, as well as the largest semiconductor M&A transaction since 2001: Kohlberg Kravis Roberts & Co and Silver Lake Partners’ $2.66bn LBO of Agilent Technologies’ semiconductor products group. Such a deal is expected to create the biggest privately held semiconductor company in the world.

The transaction also demonstrated a greater appetite from Asian accounts, which are typically unwilling to venture into the single B or lower credit space, to move down the credit curve.

SOUTH AFRICA

Deal: SA Home Loans R15bn RMBS warehousing conduit programme

Standard Bank was sole lead arranger.

This was a milestone for SA Home Loans’ funding strategy and for the country’s RMBS sector – it was the first RMBS warehousing conduit launched in South Africa. Standard Bank designed the structure to meet SAHL’s funding objectives while minimising structural costs and maximising flexibility. The extendable and callable notes created their own liquidity, and so minimised reliance on liquidity facilities. A cost-of-funds swap locked in the cost of funds on the notes and eliminated any interest rate mismatch risk, reducing the level of credit enhancement required to be injected into the vehicle.

SOUTH KOREA

Deal: Shinhan Bank $300m hybrid Tier 1

Barclays Capital, BNP Paribas and Merrill Lynch were joint bookrunners.

This deal was the first Asian hybrid Tier 1 (HT1) with a launch spread of less than 100bp over Libor. It was also the largest HT1 issue out of Korea, on par with Korea First Bank’s $300m HT1. It was more than 10 times oversubscribed with more than 150 accounts, which represents the highest number of investors for a HT1 issue. In a large offshore distribution, only 2% went into Korea and there was broad distribution into Europe, of approximately 43%.

SPAIN

Deal: $933m Iberbond 2004

RBS shared the bookrunner role with Morgan Stanley and underwrote 100% of the securitisation and mezzanine.

On December 24, 2004, RBS provided the senior and mezzanine financing for the $933m Iberbond transaction. The senior $307m (equivalent) was funded through an unwrapped securitisation, and financed 20 new Airbus A320 family aircraft under long-term leases to Iberia. This was a highly successful placement of an unusual asset class. Iberbond was an Enhanced Equipment Trust Certificate (EETC) transaction. Although largely distributed in the US, such transactions are not particularly common in Europe, where only one monoline-wrapped transaction has occured since the 9/11 attacks. Iberbond 2004 was the first unwrapped EETC transaction in Europe since the attacks.

SWEDEN

Deal: Nordea’s €750m 10 NC5 lower Tier 2 FRN

Goldman Sachs, Nordea and UBS were joint bookrunners.

In one of Nordea’s largest issues to date, the pricing and quality of the orderbook were a reflection of the excellent execution. The bookrunners were praised for the aggressive pricing achieved despite the difficult market conditions. The orderbook closed with 78 orders totalling almost €900m, generating the €750m deal that was priced at Euribor +25bp, with accounts receiving an average allocation of 86%.

SWITZERLAND

Deal: Julius Baer’s SFr5.6bn acquisition of UBS’s three private banks and asset manager GAM, and related SFr2.56bn rights issue

Goldman Sachs was exclusive financial adviser to Julius Baer, joint global co-ordinator and joint bookrunner for the rights issue alongside UBS, which also provided in-house advice on the sale.

This acquisition was a hugely significant deal for the Swiss banking market, creating Switzerland’s largest pure-play wealth manager. The deal will double the size of Julius Baer’s private banking operations, strengthen its regional reach, generate significant efficiencies and enable the firm to seize new growth opportunities. It left the firm well positioned to lead further consolidation of independent asset managers and smaller private banks in Switzerland.

The total SFr5.6bn consideration comprised SFr3.8bn in cash and a 2.1% stake for UBS in the combined entity. The Sfr2.56bn rights issue financed part of the cash portion of the consideration and was the largest equity offering in Switzerland since 2003 and the fourth largest European rights issue in 2005.

TAIWAN

Deal: Chinatrust Commercial Bank T$18bn collateralised debt obligation

UBS was sole bookrunner and lead manager.

This groundbreaking transaction was the largest securitisation from Taiwan as well as the largest collateralised debt obligation (CDO) from the Taiwan market to date. It is also the first Taiwanese CDO to include foreign assets and to feature a ramp-up period. The transaction provided much-needed additional liquidity to bond funds which, over recent months, bought large volumes of structured bonds and were under increasing regulatory pressure to restructure their portfolios.

THAILAND

Deal: Bt10.3bn Government of Thailand Securitisation

HSBC shared the role of joint lead manager and bookrunner, joint lead underwriter and joint lead financial adviser with Bangkok Bank and TMB Bank and was sole swap provider.

This complex deal, which will help to establish securitisation as a useful financial tool in Thailand, achieved a series of firsts. It was the first securitisation in Thailand offered via a public offering; the largest and longest-dated domestic securitisation in the country to date; the first Thai securitisation offered under a multi-issuance programme; the first bond issued in Thailand offered to both retail and institutional investors; the first future flow securitisation and the first of the Thai government’s ‘Mega Projects’; the first real estate-related securitisation; and the first transaction to be rated AAA by both rating agencies in Thailand: Fitch and TRIS.

TURKEY

Deal: $1bn further advance under the ARTS Trade and Diversified Payment Rights Future Flow Securitisation Programme for Akbank

WestLB was sole arranger and sole bookrunner.

Being the largest ever securitisation issue from Turkey, the deal still achieved high quality placement for the entire issue and pricing came in at the tight end of the range at 25bps a year across the issue. Full end investor placement was achieved for the entire issue, placed 40% to US investors and 60% to European investors. The deal represents the largest programme of its type worldwide. It is the largest future flow bond placement for a Turkish bank and the largest ever wrapped bond placement for a Turkish originator.

United Arab Emirates

Deal: Investcom $778m IPO

Citigroup and HSBC were joint bookrunners while Bank Audi, Abu Dhabi Commercial Bank, Dubai Bank and Global Investment House acted as co-lead managers. Bank Audi was also collection agent.

One of the hottest IPOs of the region in 2005, this was the largest international equity offering ever by a Middle Eastern company, the first to list on the newly formed Dubai-based stock exchange, DIFX. The IPO provided international investors with the opportunity to gain exposure to the fast-growing mobile markets in the developing regions. In a very short time the managers were able to gather an order book of more than $10bn that allowed an issue price at the higher end of the range. The issue was also supported by strong aftermarket performance, with shares trading up 15% in the first day of trading.

United Kingdom

Deal: £1.1bn leverage acquisition of Pearl Group by Sun Capital Partners and TDR Capital

ABN AMRO and Dresdner Kleinwort Wasserstein were joint financial advisors for the acquisition, and raised £905m finance for the leveraged transaction alongside Bank of Scotland. UBS and JPMorgan Cazanove advised the seller, UK fund manager HHG (now Henderson Group).

The deal represented the biggest acquisition of a closed life fund in the UK in 2005. It required an innovative approach to debt structuring to address regulatory requirements and achieve optimum leverage levels. The structure was designed accordingly and was well received in both the bank market and the institutional market. The transaction also created a template for further acquisition activity in the UK life insurance sector and developed an investor base for structured acquisition debt in a highly regulated sector. It pushed the boundaries in terms of leverage and pricing, and established a new precedent.

United States

Deal: Kerr-McGee defence from Carl Icahn

JPMorgan and Lehman Brothers acted as financial adviser to Kerr-McGee.

This complex deal was a very successful defence of a vulnerable company, ultimately creating a stronger player following certain asset sales and balance sheet restructuring. The $5bn bridge financing led by JPMorgan recapitalised US oil and gas company Kerr-McGee and enabled it to buy back $4bn worth of stock. To support this leverage and de-risk the company, JPMorgan also led the hedging of about 75% of Kerr-McGee’s oil production for three years and advised on the sale of certain exploration and production properties in the North Sea to help it refinance the bridge debt related to its share buyback.

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