FinanceAsia annouced the winners of its hotly-contested Australia and New Zealand awards in mid-December, recognising the best and the brightest in one of the most developed markets in Asia Pacific.
We will now explain the justification for these decisions.
The following deals stood out from the crowd thanks to their smart origination, impressive execution, and the ability of bankers and advisors to push through sometimes difficult market conditions.
The award winners and their clients will be honoured at our 14th annual Australia and New Zealand awards celebration dinner on Tuesday, February 7, 2017 at the Park Hyatt on Sydney Harbour. For more information on this event, please contact Vicki Shaw at [email protected] or +61 2 9967 5774.
Stay tuned tomorrow for the write-ups of our House Awards.
DEAL AWARDS
BEST IPO
Reliance Worldwide, A$919 million
JPMorgan, Macquarie Capital
Sometimes unexciting businesses make the best investments. Those who purchased shares in the public float of Reliance Worldwide in 2016 have certainly been well rewarded. Reliance was a family-run company providing water control systems and plumbing solutions for commercial and industrial applications until it listed on the ASX in April. The IPO was dominated by institutional investors who saw potential in the steady sanitation trade, and the share price popped 28% on its trading debut. Reliance has continued to deliver since the listing, beating prospectus forecasts and reporting an 18% increase in net sales for the full financial year.
BEST SECONDARY OFFERING
Mayne Pharma entitlement offer and placement, A$888 million
Credit Suisse, UBS
Mayne Pharma’s $652 million acquisition of a portfolio of generic drugs from Teva Pharmaceuticals and Allergan generated explosive sales growth for the business and cemented it as a leading global provider of specialty medicines. The purchase was funded by A$145 million in new debt and an A$888 million equity raising representing 75% of the company’s total market capitalisation. The follow-on was underwritten by the lead managers nearly nine months prior to launch, demonstrating a strong belief in the business by the finance sector. Since the transaction was announced, Mayne Pharma has outperformed the ASX200 by close to 9%.
BEST M&A DEAL
Ausgrid long-term lease, A$16.2 billion
Advisors to NSW Government: Deutsche Bank, UBS
Advisors to IFM Investors/AustralianSuper: Macquarie Capital
Asset owners will try anything to get a seat at the infrastructure table, as demonstrated by AustralianSuper and IFM Investors when they succeeded in securing the long-term lease of electricity company Ausgrid without going through a formal auction process. The pair surprised the market by tabling an unsolicited proposal to buy 50.4% of Ausgrid for A$16.2 billion after an earlier attempt to sell the stake to Chinese investors was blocked by the government on the argument that they were against the national interest. The bid was awarded after an accelerated due diligence period and represented the largest Australian privatisation after Telstra. The deal was both well-executed and innovative.
BEST LOCAL BOND DEAL
DBS covered Kangaroo bond, A$750 million
Barclays, DBS, National Australia Bank, RBC Capital Markets, Westpac
DBS is the winner of our best local bond award for issuing its first ever Australian-dollar denominated bond in May and the first ever Kangaroo covered bond by an Asian borrower. The lead managers generated a high-quality $1 billion order book for the trade attracting buy and hold accounts rather than fast-money investors, and allowing DBS to upsize the transaction. As much as 57% of the paper was placed with Asian investors and another 10% with investors from Europe. Despite a crowded Australian dollar deal pipeline at the time, the securities priced tighter than initial guidance at 77 basis points over the three-month bank bill swap rate.
BEST INTERNATIONAL BOND DEAL
ANZ perpetual NC10 tier one, $1 billion
ANZ, Citi, Deutsche Bank, Goldman Sachs, Morgan Stanley
Placed predominantly with fixed-income accounts, ANZ’s $1 billion tier one transaction in June was a landmark deal on many fronts. It was the first offshore hybrid transaction by an Australian major bank since 2009 and the first for ANZ since 2007. Given the size and quality of the book, ANZ was able to move initial pricing talk from 7.25% in Asia to 7% in the US, before ultimately pricing the deal at 6.75%. Orders for the perpetual non-call-10 notes exceeded $18 billion, according to the bookrunners. The transaction diversified ANZ’s Basel III hybrid investor base beyond the Australian dollar retail market while lengthening the duration of its AT1 capital base.
BEST HYBRID DEAL
AusNet 60NC5.5 hybrid, $375 million
Citi, UBS
Energy company AusNet found a clear window in March to price a debut Reg-S US dollar hybrid, pulling off a first from an Australian corporation. A challenging market backdrop meant the transaction took several months to put together, requiring tireless determination by lead managers Citi and UBS. AusNet visited five global investor centres on two separate roadshows and met more than 60 investors via face-to-face meetings and conference calls. The order book eventually grew to $2.7 billion, allowing the deal to be upsized to AusNet’s limit of $375 million. It priced at the tight end of guidance at 5.75%.
BEST DEBT FINANCE DEAL
Flexigroup ABS Trust 2016-1, A$260 million
Commonwealth Bank of Australia, National Australia Bank
While not the biggest debt finance deal in 2016, the Flexigroup deal was novel in that it comprised a A$50 million green bond tranche within a A$260 million general asset-backed deal. The proceeds of the certified green tranche were linked to the funding of solar PV systems used on residential buildings, and the presence of the tranche meant that Flexigroup was able to use scarcity to drive price differentiation. Tight pricing was also aided by a A$20 million cornerstone investment from the Clean Energy Finance Corporation. The transaction was Australia’s first green asset-backed securitisation — and the world’s first securitised bonds certified under the Climate Bonds Standard.
BEST PROJECT FINANCE DEAL
Victoria International Container Terminal, A$398 million
Bank of China, Cathay United, Citi, DBS, Investec, KfW IPEX-Bank, Standard Chartered Bank
The construction of a new high-tech container terminal in the state of Victoria will be funded with a rare export credit agency-backed multi-tranche project financing package. The package is unusual for Australian infrastructure projects in that it contains long-dated facilities with door-to-door tenors of seven, 10 and 16 years. Finland’s export credit agency Finnvera provided a guarantee and a flexible drawdown facility, and the absence of long-term services agreements meant risks had to be addressed through innovative structuring. The transaction was also completed during the privatisation of Port of Melbourne leaving lenders unsure about the identity of the ultimate concession authority. The ability to overcome this uncertainty to close a successful deal made VICT a clear winner of our best project finance award.
MOST INNOVATIVE DEAL
Asciano takeover, A$12.2 billion
Advisers to Asciano: Goldman Sachs and Gresham
Advisers to Brookfield consortium: Citi and Macquarie Capital
Advisers to Qube consortium: Credit Suisse and UBS
The complex and long-running public battle for control of port and rail operator Asciano had all the drama of a high stakes contest. Starting with an initial bid by Canada’s Brookfield Infrastructure in June 2015, the deal took nine months to complete and involved multiple competing proposals. In the end the innovative joint acquisition structure saw the break-up of Asciano’s businesses into three components. The buyers include Brookfield, Qube and six other global investment funds. The stage for the final consortium’s solution was set when Qube undertook a daring A$1.7 billion share raid to secure a 20% stake in Asciano — the largest ever after-market raid in Australian corporate history.
BEST NEW ZEALAND DEAL
Z Energy’s acquisition of Chevron NZ, NZ$785 million
Adviser to Z Energy: Goldman Sachs
New Zealand’s fuel retailing market was transformed in June when Z Energy finally completed its NZ$785 million acquisition of Chevron’s downstream fuels business in the country. Z Energy is a local supplier in a market dominated by major global brands and the purchase not only cemented Z Energy’s role as market leader but consolidated the number of players in the field from four to three. Z Energy approached Chevron with the idea of a takeover, and the supply chain synergies and reduced overhead costs stemming from the transaction look set to make it a highly efficient business. Various industry and regulatory hurdles were navigated to get the deal done.
