Deals of the Year 2007, countries H - R

HONG KONG
The Deal: Cathay Pacific’s HK$8.2bn acquisition of Dragonair
ABN AMRO was sole financial adviser to Cathay Pacific and Swire Pacific; ING provided advice to independent directors and shareholders of Cathay; Merrill Lynch and China International Capital advised Air China and CNAC, while BNP Paribas advised Air China’s board; Morgan Stanley advised CITIC; and Merrill Lynch and Citi advised CNAC on privatisation issues.
The acquisition was a highly complex transaction. It was structured over a period of three years with negotiations held between the five major listed companies involved: Cathay Pacific, its main shareholder Swire Pacific, the two vendors Air China and CNAC, and CITIC Pacific as shareholder of Dragonair.

HUNGARY
The Deal: Republic of Hungary’s £500m bond due 2016
Barclays Bank, Deutsche Bank and Lehman Brothers were bookrunners and lead managers.
Against a volatile gilt market and the widening of spreads across most of the central European euro-denominated sovereign curves, the transaction was successfully launched and achieved a high quality, oversubscribed order book. The majority of the bonds went to sterling investors in the UK and Ireland. The bond performed well in the days following the transaction, when the market was still volatile, and ultimately showed the country’s commitment to capital market investors by providing depth into their yield curve.

ICELAND

The Deal: Landsbanki’s €600m syndicated credit facilityBank of America was co-ordinator, bookrunner and mandated lead arranger; Lloyds TSB was the facility agent, bookrunner and mandated lead arranger; BayernLB and Royal Bank of Scotland were also bookrunners. Other mandated lead arrangers were BayernLB, Deutsche Bank, Lloyds TSB and Royal Bank of Scotland. Citi, Credit Suisse, Dresdner Bank, DZ Bank, Fortis, HSBC, ING, JPMorgan, Société Générale and Sumitomo Mitsui Banking Corporation were arrangers.The deal was the largest syndicated loan for an Icelandic financial institution ever raised. It was launched and successfully executed during a period of increased volatility and turbulence in the Icelandic capital markets.

INDIA
The Deal: Reliance Petroleum Jamnagar II’s $2bn project financing
HSBC and Standard Chartered were mandated lead arrangers.
The project financing deal included the largest foreign currency loan in India and the largest limited-recourse financing in Asia (excluding China) since the Asian crisis. The transaction has the longest tenor of any syndicated loan financing in India and represents the most successful and widely syndicated loan ever in the country, with participations from 52 banks, a heavily oversubscribed book and commitments in excess of $3.4bn.

INDONESIA
The Deal: Republic of Indonesia’s dual-tranche dollar bonds: new $1bn 6.875% notes due 2017 and $1bn 8.5% tap of existing notes due 2035
Barclays Capital, JPMorgan and UBS were lead managers.
The deal re-established Indonesia’s reputation with international debt investors after the disastrous government bond issue of 2005. The deal was the biggest offshore fund-raising exercise for the country, with one of the biggest books ever built for a bond in the region, and a pricing at the tightest end of the guidance. The deal also resulted in further flattening of Indonesia’s credit curve.

IRELAND
The Deal: BCM Ireland Finance’s €350m floating rate notes due 2016
Barclays Capital, Credit Suisse, Deutsche Bank, Dresdner Kleinwort and JPMorgan were bookrunners.
The deal partly financed the acquisition of Eircom by a consortium comprising of Babcock and Brown, through its subsidiary, BCM Ireland Finance, and the Eircom employee share ownership trust. The deal came at the tight end of the price range and was heavily oversubscribed, with more than €4bn of orders from about 275 accounts. The success of the transaction is impressive, particularly considering that the deal was announced and priced after an accelerated three-day roadshow.

ISRAEL
The Deal: State of Israel’s $1bn global issue due 2016
Deutsche Bank was lead manager for the deal and joint bookrunner with Morgan Stanley.
This marked the return to the US dollar global market for Israel after a three-year gap and it was the largest order book that Israel has ever achieved, allowing it to price its largest deal to date. Despite the recent war, because of Israel’s strong commitment to budget discipline and fiscal reform, the economy has returned to trend growth, creating a strong sense of confidence.

ITALY

The Deal: BNP Paribas’s €9bn acquisition of BNL
Credit Suisse, Merrill Lynch, Citi, Deutsche Bank, Nomura, Lehman Brothers, JPMorgan, Morgan Stanley, Rothschild, UBS advised BNL; BNP Paribas’ in-house team and Mediobanca advised the bidder.
This acquisition, along with 2005 winner of Deals of the Year in Italy (ABN AMRO’s acquisition of Antonveneta), marks the beginning of a wave of cross-border deals and consolidation in Italy. The deal was the largest European cross-border transaction between financial institutions in 2006. It also represented a good fit for both banks, which have historically had contacts and links.

JAPAN

The Deal: Sumitomo Mitsui Financial Group’s ¥607bn global offering
Daiwa Securities SMBC and Goldman Sachs were joint global co-ordinators and joint lead managers on the domestic tranche of the offer; Morgan Stanley, Nomura International and UBS were co-lead managers on the international tranche of the offer.
Sumitomo’s deal is the largest ever financial institution follow-on offering globally and the largest global offering since NTT DoCoMo’s follow-on in 2001. The extensive marketing campaign led to a strong, quality demand that significantly expanded Sumitomo’s international investor base and was sustained by strong domestic interest.

KAZAKHSTAN

The Deal: KazMunaiGas Exploration Production’s $2.3bn IPO
ABN AMRO Rothschild and Credit Suisse were joint global co-ordinators and bookrunners; Visor Capital was the domestic lead manager and Merrill Lynch acted as co-lead manager.
Despite market volatility and a fall in oil prices, KazMunaiGas Exploration Production brought a very successful IPO to the market for a dual listing on the local stock exchange and on the London Stock Exchange. Not only was the deal well received by the market, but it was also the largest IPO ever out of Kazakhstan and the second largest emerging European equity deal. The offering attracted new investment from international and Kazakh investors, and developed and enhanced the status of the Kazakh oil and gas sector.

KENYA
The Deal: Tiomin Resources’s $201m financing for the Kwale Mineral Sands project
Standard Chartered, WestLB, Caterpillar Financial Australia and the African Development Bank were mandated lead arrangers and senior lenders.
In July 2006, Canadian mining company Tiomin Resources raised $201m limited recourse project financing for the construction and development of Kwale Mineral Sands project in eastern Kenya. The deal is significant for being Kenya’s first major mining project and is also the country’s largest foreign investment project in recent years. The project has important development consequences, and social, environmental and community matters had to be carefully factored in. Despite challenges in getting the project off the ground, the arrangers were able to meet the financing requirements in just four months, co-ordinating multi-sourced financing from commercial institutions and development finance institutions.

KUWAIT

The Deal: Mobile Telecommunications’ $4bn revolving credit facility
NBK Capital was financial adviser to the borrower while BNP Paribas, Calyon, Credit Suisse and UBS acted as mandated lead arrangers and bookrunners.
The transaction was the largest debt syndication out of Kuwait and the second largest in the region. It attracted a high and diverse number of participants, including 39 financial institutions from 18 different countries in Europe, Asia and the Middle East. The loan acted as a credit facility for Mobile Telecommunications’ future acquisitions and was a rarity as a five-year facility – most corporate loans in the Middle East are for one year.

LATVIA
The Deal: Parex Bank’s €200m bond due 2011
Deutsche Bank and HSBC were joint bookrunners and lead managers.
The transaction built a strong, good quality order book despite congestion in the market at the time. Interest was expressed by a diverse investor base from a well-balanced geographical spread, which included a good mix of retail and bank investors.

LEBANON
The Deal: Republic of Lebanon’s L£10,000bn 9.375% note due 2011
Blom Bank and Byblos Bank acted as joint lead arrangers and bookrunners.
The pioneering deal was the first local currency Eurobond issue in Lebanon and the issue size of the first Eurobond was L£400bn ($267m) issued on March 30, 2006 for a maturity of five years with a coupon of 9.375%. The new note was issued as a Eurobond structure to solve the settlement and liquidity problems thus attracting institutional investors, regionally and internationally. The proceeds will be used to refinance indebtedness and general funding purposes.

LITHUANIA
The Deal: Republic of Lithuania’s €400m tap of the 3.75% bond due 2016
Deutsche Bank and UBS were joint bookrunners and lead managers.
The bond issue completes Lithuania’s plans to create a liquid benchmark for investors, bringing the total value of the issue to E1bn and allowing the bond to be traded on the NewEuroMTS (the market dedicated to the trading of euro-denominated government securities of the 10 new states that entered the EU on May 1, 2004). The transaction attracted new investors, in particular from Scandinavia, Switzerland and Ireland, but also from Italy and Greece. About 50 accounts participated in the two-times oversubscribed book, which was formed mainly of ‘real money’ accounts that typically invest in EU-member governments.

MADAGASCAR
The Deal: Madagascar Oil’s $85m private placement
Jefferies arranged the private placement.
Last May, Madagascar Oil completed a $60m private placement of its shares, the largest ever private financing in the oil sector in Madagascar. The newly issued shares were sold to US institutional investors, and valued the company at about $600m. Investment banker Jefferies had to overcome a number of negative perceptions, not least the fact that Madagascar is the fourth poorest country in the world and lacks necessary infrastructure. Proceeds from the placement will be used to develop the company’s oil interest in the onshore Tsimiroro field in west Madagascar. The country has yet to produce oil commercially.

MALAYSIA
The Deal: Khazanah Nasional Berhad’s $750m 1.23% Islamic exchangeable bond due 2011
UBS was global co-ordinator, joint bookrunner and joint lead manager; CIMB and HSBC Amenah were the other joint bookrunners and lead managers; Emirates Financial Services and Kuwait Finance House were co-lead managers.
As the world’s first fully sharia-compliant Islamic exchangeable bond, this issue was a key milestone in furthering the evolution and sophistication of Islamic financing alternatives. The deal incorporated several groundbreaking features to ensure adherence to shariah principles while maintaining appeal to the conventional equity-linked investor base. It was the largest ever equity-linked issue out of Malaysia.

MEXICO
The Deal: Comisión Federal de Electricidad’s 1.5bn pesos 8.58% notes (certificados bursátiles) due 2036
Banamex Citigroup was sole lead arranger and bookrunner; HSBC and Institución de Banca Múltiple Grupo Financiero were the issuing trusts.
Two weeks after the government had issued its first ever 30-year fixed rate bond in Mexican pesos, and in a politically uncertain climate – one month prior to the change of president – the Comisión Federal de Electricidad (CFE) issued its own first 30-year certificados bursatiles. The deal represented a first among local state-owned companies and overwhelmed previous achievements by similar companies both in terms of tenor and pricing. CFE obtained a spread of 57 basis points over the government benchmark.

NETHERLANDS
The Deal: Valcon Acquisition’s €9bn take-private of VNU
redit Suisse, Rothschild and Evercore Partners advised VNU; ABN AMRO, Citi, Deutsche Bank, ING and JPMorgan advised Valcon Acquisition.
Valcon Acquisition, a consortium formed by Alpinvest, Blackstone, Carlyle, Hellman & Friedman, KKR and Thomas H Lee, struck the largest leveraged buyout and public-to-private deal in Netherlands to date, overcoming hostility from some shareholders. The acquisition financing included substantial credit facilities arranged by the acquirer’s advisers.

NEW ZEALAND
The Deal: Air New Zealand’s $127m Japanese operating lease
ING was overall arranger, equity arranger, debt arranger and underwriter, security trustee and facility agent; BNP Paribas and CIC acted as joint-debt arrangers and underwriters.
The deal is the first Japanese operating lease closed for a wide-body aircraft under the new Japanese tax guidelines. It is also the first commercial aircraft financing involving a New Zealand dollar loan – while the equity portion of the deal was in US dollars – and the first time that a currency other than US dollar, Japanese yen, euro or British pound has been combined with a Japanese operating lease.

NIGERIA
The Deal: Guaranty Trust Bank’s $350m 8.5% Eurobond due 2012
Standard Bank and Afrinvest were the joint lead managers. Standard Bank was the sole book-runner.
In January, Nigeria’s Guaranty Trust Bank (GTB) launched a five-year $350m Eurobond, the first dollar-denominated Eurobond issued by a Nigerian company in the global market. The initial $300m issue was 1.7 times oversubscribed; and $350m in orders were eventually allotted. The bond was priced at an effective yield to maturity of 8.625%. The deal performed badly in the secondary market (see Team of the Month, page 64) but is still hugely significant and indicative of the strides that the country has made in improving its credit story. Not so long ago, few foreign investors would have touched Nigeria outside of the oil and gas sectors, but now it is an increasingly compelling opportunity. It is also particularly impressive that bookrunner Standard Bank was able to generate the interest in such a relatively unknown credit.

NORWAY
The Deal: Anadarko’s $901m sale of Knotty Head and Big Foot to Statoil
Jefferies advised Anadarko on the Knotty Head sale and Lehman Brothers advised Anadarko on the Big Foot sale. An in-house team advised Statoil.
The deal was brought successfully in an environment of strong competition for a unique set of assets. The efforts of Anadarko Petroleum Corporation’s advisers helped to expand the deal beyond the sale of Knotty Head oil field to Statoil, initially announced, to include Big Foot oil field. The divestitures advanced Anadarko’s efforts to reduce financial leverage, following its earlier acquisition of Kerr-McGee and Weston Gas Resources.

OMAN
The Deal: Al Sawadi Investment & Tourism Company’s $925m real estate bond for the Blue City development financing
Bear Stearns International was sole arranger and joint lead manager and joint bookrunner with Credit Suisse Securities (Europe) and Standard Chartered Bank; SHUAA Capital was co-lead manager.
This was the first real estate bond financing of its size in the Gulf and the huge $15bn-$20bn Blue City development is part of the government’s strategy to diversify away from oil and exploit its tourism potential. The unique funding structure applied a combination of business securitisation, traditional real estate lending, project finance and credit enhancement.

PAKISTAN
The Deal: Pakistan Mobile Communications’ $53m six-month Kibor + 2.85% listed bond due 2013 and $250m 8.625% senior unsecured notes due 2013
MBC Bank was adviser and lead arranger of the $53m listed bond, with Jahangir Siddique and KASB acting as brokers. ABN AMRO and Deutsche Bank were joint lead managers and bookrunners on the $250m unsecured notes.
Pakistan Mobile Communications issued two groundbreaking deals last year. The $53m seven-year listed bond was the largest listed corporate bond in the country, which set the stage for the establishment of an efficient corporate bond market in Pakistan due to its size, its tenor and its wide distribution among non-bank investors. The $250m unsecured notes issue is the first corporate high yield offering out of the country and, despite the inaugural nature of the transaction, huge demand was expressed by 230 investors from 29 countries filling a 15-time oversubscribed order book. Market reaction was so positive and unprecedented that similar, but lower, investor interest was reached only by the Islamic Republic of Pakistan sovereign bond earlier in 2006.

PERU
The Deal: Concesionaria Trasvase Olmos’ $100m bond issues
Banco de Crédito del Perú and First Capital were structuring agents while Credibolsa (a subsidiary of Banco de Crédito del Perú) acted as the placement agent.
This groundbreaking deal marked a series of firsts in the Peruvian capital markets. It was the first greenfield project financed in the local capital markets, the first project with a regional government off-taker and guarantor and the first bond issues to include deferred issuance mechanism. The bonds are also significant in respect to one of the infrastructure projects they finance, diverting waters from the Huancabamba river to the lands of Olmos, which has a long history in Peru and was first proposed in 1924. The bond repayment structures vary and maturities range from 13.5 to 19.5 years

PHILIPPINES
The Deal: Ayala Corporation’s 5.8bn pesos perpetual preferred shares
HSBC structured and executed the transaction.
This is the first local currency corporate hybrid in Asia that was specifically structured to fall under equity accounting since the adoption of International Financial Reporting Standards in the Philippines. The transaction has revitalised the domestic market and has opened up new financing alternatives for corporate issuers across the Asia-Pacific region. It also highlights the value of an issuer’s domestic market as a viable potential source of volume non-dilutive equity. Strong retail and institutional demand allowed Ayala Corporation to almost double the issue size.

POLAND
The Deal: BOT Elektrownia Belchatów’s €879m structured corporate facility
ING was global co-ordina tor, mandated lead arranger and bookrunner. Citigroup was also mandated lead arranger and bookrunner, while the European Bank for Reconstruction and Development participated as mandated lead arranger. Bank Zachodni WBK, Bayern LB, Dexia Kommunalkredit Bank, Kredyt Bank, Nordea, Rabobank Polska, UniCredit Group and WestLB were lead arrangers. Bank Millennium and RZB Group were lead managers.
The deal was the largest financing transaction of the power sector in Poland to date and the first one of its kind in central and eastern Europe. The transaction is a structured corporate deal with project finance enhancements.

PORTUGAL
The Deal: Amorim Energia’s €1.64bn acquisition of 32.6% in Galp Energia and subsequent IPO
Grupo Santander was exclusive financial adviser to Amorim;  Caixa-Banco de Investimento, Espírito Santo Investment, Merrill Lynch and Morgan Stanley were joint global co-ordinators, joint lead managers and joint bookrunners on the IPO.
This was Portugal’s largest M&A deal last year and the largest IPO in the country in nine years; both transactions helped to develop the government’s plan to strengthen the gas and electricity sectors and implement privatisations. Amorim’s stake in Galp Energia gives the Portuguese state a strong national presence in the management of a strategic company and presents a credible partner to ENI, Galp Energia’s other shareholder with a similar stake in the company.

QATAR
The Deal: Gulf Finance House’s $2.6bn private equity investment in Energy City Qatar
Gulf Finance House was lead promoter and financial adviser while Abu Dhabi Investment House and Kuwait Investment Company were strategic partners.
A private equity offering, Energy City Qatar (ECQ) is a pioneering development that will be the Gulf’s first hydrocarbon industry hub. ECQ will be a single point of access to markets and expertise, the Middle East home for global players in the hydrocarbon value chain. The first project of its kind in the Gulf is set to achieve high expected returns (35% return on investment) over the 18-month investment horizon. Huge regional investor appetite led to a doubling of fund size.

ROMANIA
The Deal: Erste Bank’s €3.75bn acquisition of Banca Comerciala Romana
Daiwa Securities SMBC Europe advised the vendor, the Romanian government; Rothschild was exclusive financial adviser to Erste Bank; Erste Bank, JPMorgan and Goldman Sachs were the global co-ordinators of Erste’s €2.8bn capital increase to finance acquisition while ABN AMRO Rothschild, Citi and Credit Suisse were co-leads.
This is a remarkable transaction in many respects. Banca Comerciala Romana is the leading bank in Romania and was one of the few major public sector banks in central and eastern Europe (CEE). The price paid by the Austrian acquirer is the largest ever for a cross-border acquisition in the country and the largest ever banking acquisition in central and eastern Europe.

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