Best for Leveraged Finance 2019
China Merchants Bank
Up against state-owned banks such as Bank of China and Industrial and Commercial Bank of China, the biggest lenders even at a global scale, CMB found a space among the very best in leverage finance.
In 2018, it established a loan syndication team under the M&A financing division supervised by Fan Yuanyuan, managing director in the investment banking department.
In terms of scale, despite an overall 60% decline in M&A lending activities across Asia Pacific in 2018, CMB was involved in Rmb100.7 billion ($14 billion) worth of M&A transactions last year and Rmb32.5 billion for the first five months of 2019. It has an ambitious target of Rmb150 million by the end of the financial year.
CMB is also second to none when it comes to the ability to originate and syndicate deals, having arranged over Rmb100 billion of acquisition-related loans in the last year, hitting a new record for the bank.
The joint stock commercial bank was seen in many high-profile privatizations of domestic and Hong Kong-listed companies, including Global Logistic Properties and Belle International, and domestic as well as cross-border M&A deals, both as a joint mandated lead arranger and on a sole basis.
Another focus of the bank had been mixed-ownership state-owned enterprise reform.
During our awards period, CMB was involved in the financing for China Merchants Port’s takeover of Liaoning Port Group for Rmb240 billion, Shandong Weigao Group Medical Polymer’s acquisition of Argon Medical Devices in the US, as well as Tianshui Huatian Technology’s acquisition of Malaysian semiconductor company Unisem – a transaction that came with challenges.
According to CMB, it was a mandated lead arranger and bookrunner for a £740 million syndicated loan for Chinese steel maker Jiangsu Shagang Group for acquiring further stakes in Global Switch, a UK-based data centre operator.
As one of the three MLABs and the only Chinese name, CMB also helped to arrange the $700 million financing for Ningbo Joyson Electronic’s acquisition of Japan-based Takata, and was also seen in a HK$15.5 billion ($2 billion) facility for Shenzhen Investment Holdings’ acquisition of Hopewell Highway Infrastructure.
While CMB has a slightly more aggressive approach when it comes to leveraged financing compared with the more traditional, state-owned lenders, its competitors nevertheless acknowledge CMB’s increased established domestic market position over the years, its growing presence in cross-border deals and its ability to innovate.
Special Mention: Bank of China
In offshore leveraged lending involving a Chinese company, Bank of China has been a star. Having finished a strong 2018, BOC rode the momentum into the first quarter of this year to score seven deals as a mandated arranger across the Asia-Pacific region, ranking number one among Chinese and international banks, with a loan volume of $746 million and a 6.53% market share, according to Thomson Reuters’ data.
Operating from its Beijing headquarters as well as its three overseas syndicated loans centres in Hong Kong, London and New York and offices across 57 countries and regions, BOC was involved in over $20 billion of acquisition-related financing between January 2018 and July 2019.
During our awards period, the big four banks provided financing for cross-border transactions that included Chinese acquirers CDH Investments, CNIC, Cosco Shipping Holdings and Joyvio Agriculture Development.
In the Anta Sports’ acquisition of Finland’s Amer Sports in December 2018, BOC was the only Chinese bookrunner in a €2.2 billion loan syndicated in Asia, getting involved from early on with its international peers. The loan was signed in February.