Event name

The Global Borrowers & Investors Forum – Asia

06 September 2018
Singapore, Singapore

Sponsors

There is no better way to network with your key clients whilst providing a host of interesting panels and lively workshops to keep them informed on the latest market trends. Euromoney conferences provide an unparalleled opportunity for you to reach and remain at the forefront of your market.

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Co-Host

GlobalCapital

Lead Sponsors

Barclays
China Chengxin International Credit Rating
DBS Bank Ltd
HSBC
Natixis
Standard Chartered Bank

Associate Sponsors

Mandiri Sekuritas
Moody's Investors Service
S&P Global Ratings

Cocktail Sponsor

Raffaello Capital

Supporting Organisations

AIMA Hong Kong
Asia-Pacific Structured Finance Association
ChinaGoAbroad
China Securitization Forum
EuroCham Singapore
HedgeConnection
ICMA
Singapore Malay Chamber of Commerce and Industry
Singapore Venture Capital & Private Equity Association
VBMA

Media Partners

Asiamoney
Euromoney
GlobalRMB

Data Partners

CEIC Data
EMIS

Event Overview

Click here to read about how Asian issuers are finding opportunity in hybrid securities

The annual Global Borrowers and Investors Forum –Asia returns this September to close off 2018 and give its 500+ participants a head start on planning and execution for 2019.

Our revamped agenda will explore the hottest issues facing specific markets throughout Asia-Pacific, as well a deep dive into the specifics of green bonds, high yield bonds and project bonds. For issuers and investors around the region, and further abroad, this is a first class opportunity to maximize your time out of the office amongst an exceptional network of peers, partners and prospects.

 

Key discussions for 2018 include:

  • Project bonds – Finally a reality?
  • Indonesia’s bond market
  • Asian hybrid capital: Evolution or revolution?
  • The PRC markets – offshore or onshore?
  • Developing Asia’s bond market: Local issuers, global investors
  • The outlook of Formosa bonds: Everything you need to know
  • Socially responsible investing: The rise of an asset class
  • And much more

 

Cocktail reception sponsored by RaffAello Capital after the conclusion of the forum, from 5pm to 7pm.

 

Here’s what past delegates have had to say about this event:

‘Fantastic conference in Singapore with a strong line-up of speakers. Look forward to the next edition in Singapore again!’

Treasury Director, Singapore Technologies Telemedia

 

‘Well-organised with great speakers and content.’

Investment Director, Teneo Advisors

 

‘A great event to learn from experts who are willing to share the latest insights on the global financing market status, new ideas, and future trends’

Managing Partner, Emtac International

 

‘Good insightful and informative event not to be missed for investors.’

Chief Operating Officer, Difinitcap Ventures

 

For more information or to register, please contact our customer services team at rsvp@euromoneyasia.com.

For speaking opportunities, please contact Christy Wong at Christy.wong@euromoneyasia.com

For sponsorship opportunities, please contact Robert Ball at robert.ball@euromoneyasia.com.

Speakers

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Keynote Speaker

Mark Mobius

Partner & Co-Founder
Mobius Capital Partners

Full Profile

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Keynote Speaker

Tony Shale

Chief Executive Officer, Asia
Euromoney Institutional Investor PLC

Full Profile

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Keynote Speaker

Liew Tzu Mi

Chief Investment Officer, Fixed Income
GIC

Full Profile

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Sebastian CP Cheng

Head of IR
China Jinmao Holdings Group

Full Profile

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Morgan Davis

Reporter
GlobalCapital

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Sergio G Edeza

Senior Vice President & Head of Treasury
San Migual Corporation

Full Profile

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Terry Fanous

Managing Director, Public, Project & Infrastructure Finance
Moody's Investors Service

Full Profile

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Ronie Ganguly

Director, Credit Portfolio Manager
BlackRock

Full Profile

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Jessica Gu

Director, Foreign Currency Funding, Treasury Group
Export-Import Bank of Korea

Full Profile

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Asad Haque

Chief Executive Officer
Mandiri Securities

Full Profile

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Sean Henderson

Co-Head of Debt Capital Markets, Asia Pacific
HSBC

Full Profile

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Connie Heng

Head Of Capital Markets, Asia Pacific
Clifford Chance

Full Profile

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Jonathan Ho

Fixed Income Trader, Treasury
Cathay United Bank

Full Profile

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Chaoni Huang

Director, Green & Sustainable Solutions, Investment Banking, Asia-Pacific
Natixis

Full Profile

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Xavier Jean

Senior Director, Corporate Ratings
S&P Global Ratings

Full Profile

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Shafiq Kashmiri

Associate Director, Financing Solutions Group, Debt Capital Markets, Asia Pacific
HSBC

Full Profile

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Michelle Lai

Executive Director, Head of Capital Market
Standard Chartered Bank

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Clifford Lee

Managing Director, Head of Fixed Income
DBS Bank

Full Profile

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Chung Chee Leong

President and Chief Executive Officer
Cagamas

Full Profile

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Eric Liu

Portfolio Manager
BlackRock

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Akiyo Miyakawa

Director, Treasury Department
Development Bank of Japan

Full Profile

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Kheng Siang Ng

Asia Pacific Head Of Fixed Income
State Street Global Advisors

Full Profile

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Yingzhe Shi

Deputy Director General & Head of Green Bond Lab
International Institute of Green Finance, Central University of Finance and Economics (CUFE)

Full Profile

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Desmond Soon

Head Of Investment Management, Asia Ex-Japan And Portfolio Manager
Western Asset Management

Full Profile

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Abe Sung

Partner
Lee and Li

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Avinash Thakur

Managing Director, Banking, & Head of Asia Pacific Debt Origination
Barclays

Full Profile

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Matthew Thomas

Asia Bureau Chief, Banking & Capital Markets
Euromoney Institutional Investor

Full Profile

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Ariel Yang

Vice President
China Chengxin International Credit Rating

Full Profile

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David Yim

Managing Director, Head Of Debt Capital Markets, Greater China & North Asia
Standard Chartered Bank (Hong Kong)

Full Profile

Videos

Articles

The following is a sponsored article by HSBC.

Asia’s maturing capital markets are embracing hybrid securities. For both corporates and financial institutions, hybrids allow an approach to fund raising as an equity alternative. While a niche product, hybrids can be used by anyone in any market— as long as they understand how to use it.

 

Hybrid securities, while documented similarly to traditional debt instruments, allow borrowers to obtain equity content from accounting or rating agencies’ perspective. Contrary to popular belief, hybrid bonds should not be looked at as a debt alternative, but rather as an equity option because many lenders, agencies and regulators give them equity-like treatment. When issuers need to strengthen their balance sheet with equity or capital, hybrids present a non-dilutive and cost efficient alternative to traditional equity alternatives.

 

Hybrid issuance in Asia ex-Japan has taken off in recent years, paralleling global growth. In 2010, Asian issuers sold just three dollar hybrid deals, for a total volume of USD3.3bn, according to Dealogic data. In comparison, total DCM issuance volume across G3/SGD in Asia for that year was USD94.3bn. By the end of 2017, the number of benchmark hybrid deals across corporates and financial institutions had surged to 69, worth USD44.4bn, representing around 12.8% of the total Asian international DCM issuance. While the volatile 2018 market has set Asian hybrid issuance back, it’s still on track for a fruitful year.  Asian borrowers have contributed 21 of the 98 benchmark hybrid deals in the public international markets in 2018 up to October.

 

While hybrid structures may seem like a defensive strategy, they’re actually often utilised by corporates issuers in a position of strength, when their balance sheets are growing. For example, Baa1 / BBB+ rated Vodafone recently raised more than EUR4bn in a multi-currency hybrid transaction to back its EUR18bn Liberty acquisition. Closer to home in Asia, there are numerous examples from investment-grade issuers across a broad range of sectors with the likes of AusNet, CK Hutchison, BHP Billiton, PTTEP, ChemChina, Genting Singapore all opting to use hybrid structures in recent past.

 

The growth in issuance is supported by interest from investors. CK Hutchison’s use of hybrid securities is a good example of the evolution of the market. When its sister company Cheung Kong Infrastructure Holdings first sold a USD1bn hybrid back in 2010, 55% of the deal was allocated to private banks, while asset managers took just 36%. Just a few years later, when CK Hutchison sold a USD1bn hybrid bond in May 2016, more than three-quarters of the trade, or 79%, was allocated to fund managers, insurers and public sector investors, while just 19% went to private banks.

 

“What we have right now is the growing support from the institutional community, looking at this product as an interesting asset class for their portfolios,” stated Shafiq Kashmiri, Associate Director, Financing Solutions Group, Debt Capital Markets, Asia Pacific at HSBC. 

 

Diversity is a key theme for the hybrid market, and as bankers are quick to emphasise there is no single hybrid structure, nor is there only one type of issuer that can use hybrids.

 

“We have seen quite a diverse range of issuers and structures, both domestically and globally,” said Sean Henderson Co-head of Debt Capital Markets, Asia Pacific at HSBC. “The market has obviously seen some real changes, as we’ve gone through a relatively bullish environment to a rising interest rate cycle.”

 

For issuers, the use of hybrid structures may seem confusing, due to the lack of clarity about what constitutes a hybrid bond and when it should be appropriately used. The breadth of the hybrid bond market presents opportunities for borrowers, provided the correct hybrid structure is used. However, hybrid issuance is still a niche and should be used strategically, depending on the issuer needs and the market cycle, rather than purely opportunistically.

 

For investors, it is all about the structure and the appropriate risk premium above credit risk. For instance, many investors would jump at the issuer-friendly fixed coupon-for-life structures that have been selectively issued in the market by strong credits.

 

Cheung Kong Property (“CKP”) sold Asia’s largest fixed-for-life hybrid, a USD1.5bn 4.6% perpetual non call three year trade, in May 2017 when issuance was booming and investors were snapping up deals at prices that were more advantageous for the issuers than investors. The transaction was notable as it was the issuer’s debut transaction in public dollar market, and it managed to garner USD6.9bn of demand, allowing the company to lock in indefinite equity at an attractive cost of financing.

 

The Philippines’ Ayala Corp took a similar approach, closing a USD400m fixed-for-life trade in September 2017. The transaction, which marked the borrower’s first dollar bond in more than a decade, utilised the hybrid investor base to allow the company to secure indefinite funding, given the non-resettable coupon structure.

 

But these are just one type of issuance, and certainly not a mainstay in the market. “Fixed-for-life or zero-coupon bonds are what we call bull market trades,” said Kashmiri, adding that these more aggressive hybrid structures have been used in the last couple of years because of the strength of the market and relatively benign rates environment.  Recent trades have returned to the core principle of looking at attractively priced intermediate duration ‘equity rent’ hybrids rather looking for long-dated or indefinite equity hybrids, he adds.

 

For investors, the structure is of primary importance, even before the credit itself, said Gareth Nicholson, Head of Fixed Income, Discretionary Portfolio Management at the Bank of Singapore.

 

“People have obviously accepted some things that maybe they would not [otherwise],” said Nicholson, explaining the appeal of structures like fixed-for-life bonds in a bull market. The buy-side has been in desperate need of yield. “As investors, we know there’s no such thing as a free lunch,” he added, explaining that just like investing in high yield bonds, risks associated with hybrids pick up as the market becomes more volatile. Default rates will rise, which is why it is important for investors to understand the structure of their hybrid investments, and the associated risk, said Nicholson.

 

More protected structures, such as those with large step-ups or issuances from strong credits with a likelihood to call their notes, will continue to be investors’ preferred play especially in a volatile market, like that seen this year. While less aggressive than a fixed-for-life structure, these hybrids are still attractive for borrowers.

 

For example, a hybrid structure can serve as a pro-active approach to ratings, while a company is going through expansions via acquisitions. Companies who find their balance sheet stretched may consider a bond with equity treatment to allow them to operate at their current ratings. Such was the case with SoftBank’s USD4.5bn dual tranche bond sold last year, or BHP Billiton’s massive dual currency USD6.5bn hybrid sold in October 2015.

 

Companies like Genting Singapore have also taken advantage of the hybrid structure to tap Asia’s deep local currency markets. One of the benefits of the Asian market is the option of tapping yield seeking high net-worth investor demand in local currencies for hybrid issuance. The Singapore dollar market is generally receptive to hybrid products given the strong and growing private wealth community, but other markets like the Australian dollar, Malaysian ringgit and Thai baht are also viable options if such currencies match the operational needs for issuers.

 

As for what’s next, it seems likely that investors will see more hybrid issuances from China’s state owned enterprises given the state’s de-leveraging policies. Another thematic could be M&A related financing to pro-actively manage the capital structure to operate at existing ratings or internal gearing targets similar to exercises contemplated by ChemChina, or the Cheung Kong group of companies.

 

However, these are just the start of options for hybrid products, and borrowers considering them will need to assess their personal needs in the context of the market backdrop. With the right combination of an appropriate structure and targeted investor base, these products could continue to grow within popularity in the Asian market.

 

Events, Articles and Videos that might interest you

Asian issuers find opportunity in hybrid securities

12 November 2018 |

Hybrids are growing in popularity as an approach to fund raising as an equity alternative in Asian markets.