Asiamoney China Corporate and Investment Banking Awards 2018
View the results of the 2018 Asiamoney China corporate and investment banking awards here.
China’s Best Overall Corporate and Investment Bank: Bank of China
Bank of China consistently shows leadership across the league tables when it comes to serving its corporate clients’ fund-raising needs.
China’s fourth-largest bank by assets was top of the debt capital market league tables as the leading loan bookrunner for the year to May, according to Dealogic; it also ranked first for DCM and in fourth place for equity capital markets as bookrunner for big state-owned enterprises. Taking into account both state-owned and private corporate clients, the bank ranked second as DCM bookrunner.
In June 2017, the bank helped leading state-owned insurer China People’s Insurance Group to issue a 10-year capital supplement bond, raising a total of Rmb18 billion ($2.6 billion), with a coupon of 4.99%. This was the insurer’s single largest issuance to date.
Led by chairman and president Chen Siqing, the bank has consistently shown its willingness to engage in financial innovation. Last August, it helped online automobile lender Shanghai Yixin Financial Leasing to issue Rmb502 million-worth of asset-backed notes.
In March, the bank helped Peking University Science and Technology Park raise Rmb1.8 billion through the sale of asset-backed notes. The notes – which were securitized by the trust beneficiary rights the university had through its ownership of the science park – were the first commercial property mortgage-backed securities, or CMBS, ever sold in China.
The bank has also shown leadership in helping a wide range of global issuers to raise funds in China’s onshore bond markets through the sale of panda bonds. Last year in July, for instance, the bank helped Hungary’s central bank to raise Rmb1 billion in the interbank bond markets and with Rmb1 billion-worth of currency swaps. The panda bond, which had a three-year tenor and a coupon of 4.85%, and the currency swaps marked the first time Hungary had entered the Chinese interbank bond market.
The bank has shown leadership with foreign corporate issuers in China too. Late last year, it helped Volkswagen Group’s financial services unit to raise Rmb3.5 billion through the sale of asset-backed securities. The securitization transaction, known as Driver China eight, was backed by vehicle financing contracts from Volkswagen Finance China. The ABS sold in two tranches, with tranche A placed at a fixed interest rate of 5.14%, and tranche B at 5.60%.
Best International Corporate and Investment Bank in China: HSBC
HSBC already has the largest branch network in China among foreign banks, with over 170 outlets in more than 50 cities, but it continues to expand on the mainland. In December last year, it launched HSBC Qianhai Securities, the first securities joint venture in mainland China to be majority-owned by any international bank.
HSBC, led by the group’s chief executive John Flint, continues to be recognized as the leading bank for international renminbi products and services, ranking first in Bloomberg’s offshore renminbi bond underwriting league table in 2017 with a 28% market share.
HSBC also has the largest share, at 53%, of approved quota for the renminbi qualified foreign institutional investor (QFII) custodian business.
The bank was appointed one of the first market makers for Bond Connect, a bond trading link between mainland China and Hong Kong that began last year, and it completed its first deal in July 2017. Since then, HSBC has also acted as one of the underwriters for the Agricultural Development Bank of China in its first public issue of policy financial bonds to both local and foreign investors – the first transaction of its kind via Bond Connect.
In October 2017, Chinese regulators granted HSBC a new bond underwriting licence for the sale of panda bonds, making it the first foreign bank to be allowed to offer offshore corporate clients greater access to China’s capital markets.
Last year in November, HSBC was the joint bookrunner and joint lead manager for a deal by China Development Bank, the nation’s leading policy bank. The €1 billion bond issue came with a four-year tenor and a coupon of 0.485%. During the same month, HSBC helped the Export-Import Bank of China to raise €1 billion through the sale of a bond with a tenor of 5.5 years and a coupon rate of 0.75%. That particular sale was the largest and longest-ever euro tranche offer by China Exim Bank.
The bank has been active in M&A advisory work too. Last November, it was an adviser to China’s largest hypermarket operator, Sun Art Retail Group, when it sold a 36% stake to Taobao China Holdings, a subsidiary of Alibaba.
China’s Best Corporate and Investment Bank for Debt Capital Markets — Domestic: ICBC
In the 12 months to May this year ICBC was the market leader in underwriting a total of 1,283 debt financing instruments, with a combined valuation of Rmb1.22 trillion ($179 billion), accounting for 12% of the market, according to Wind Information, China’s leading market data services provider.
Based in Beijing and led by chairman Yi Huiman, ICBC helps with financing for the likes of China’s largest asset owners; chief among them is Central Huijin Investment, which represents the central government in majority stakes of the nation’s largest financial institutions, among them ICBC itself.
Last year, the bank helped Huijin issue Rmb15 billion-worth of bonds for acquisitions. On top of that it helped many other leading financial institutions raise funds for acquisitions, capital expansions or debt restructuring through bond sales, including Rmb22 billion for medium-sized rival China Everbright Bank, Rmb30 billion for leading small enterprises lender China Minsheng Bank and Rmb26 billion for distressed assets manager Cinda Asset Management.
At the same time, ICBC is recognized as a market leader in one of China’s newest debt capital market asset classes, green bonds. In the last year, the bank led the market by issuing a total of seven green bonds, with a total value of Rmb45 billion.
The bank is also a sales leader in helping many global financial institutions to tap China’s domestic bond markets. In the past year, ICBC underwrote a total of 20 panda bonds, raising some Rmb37 billion for clients, among them Japanese financial institutions Mizuho Bank and Mitsubishi Tokyo UFJ Bank, which were the first from Japan to tap China’s domestic bond markets.
Mizuho raised Rmb500 million through the panda bonds, which had a three-year tenor and a coupon of 5.3%.
The bank is also a leader in asset-backed securities. Last year, it successfully issued 15 ABS notes with a total value of Rmb94 billion.
China’s Best Corporate and Investment Bank for Debt Capital Markets — Cross-Border: Bank of China
Bank of China stands above all rivals in terms of cross-border issuance of bonds. According to Bloomberg, the bank has led Chinese offshore bond issuance market in the last two years: it had 130 offshore bond issues and a market share of 9.26% in 2016, and 232 bond issues and a market share of 7% in 2017. In the first six months of this year, the bank underwrote 126 Chinese offshore bonds, to give it a market share of 7%.
The bonds often help Bank of China’s clients achieve specific objectives. For instance, the bank has served as a fund-raising platform for many Chinese groups seeking offshore acquisitions.
One deal that stands out from last year was when the bank, led by chairman and president Chen Siqing, helped state-owned chemicals giant ChemChina succeed in the largest offshore acquisition ever by a Chinese investor. The bank, through its offshore unit BOCI, provided about half the $20 billion fund-raising – primarily through the sale of perpetual bonds – to help the Beijing-based chemical manufacturer complete the $43 billion takeover of Swiss seeds conglomerate Syngenta through the sale of two senior notes, the first raising $4.95 billion and the second raising €1.2 billion.
Another example is Qingdao-based home appliance manufacturer Haier Group. The bank helped the group to raise $1 billion through the sale of a bond with a five-year tenor last year, offering a coupon of 3.875%. The bond issue, the first by Haier in offshore markets, will help the company expand its global operations.
China’s Best Corporate and Investment Bank for Equity Capital Markets — Domestic: CITIC Securities
China’s leading brokerage house, Citic Securities, was the clear dominant player in China’s equity markets. According to Dealogic, the firm achieved 55 initial public offerings in the 12 months to May, putting it in first place in the league tables by deal count.
Citic Securities, however, has experienced increased competition in the last year. The volume it raised, $11.8 billion, is less than the $14.8 billion raised by China Securities, the leader by volume. That said, Citic Securities can claim credit from the fact that it is a substantial shareholder in the rival firm, which is a joint venture between it and China Jianyin Investment Co.
The last year was largely absent big IPO deals, however. Among Citic Securities’ larger fund-raisings were the Rmb4.9 billion ($720 million) IPO of regional brokerage Huaxi Securities on the Shenzhen Stock Exchange and the Rmb4.1 billion IPO of Caitong Securities on the Shanghai Stock Exchange.
The bigger deals came in the form of restructurings that involved secondary placements and asset injections. Chief among them was Citic Securities’ involvement in the Rmb26.7 billion restructuring of Nanjing-based, Shenzhen-listed smart grid power equipment manufacturing Nari Technology, which also involved the issuing of Rmb6.1 billion-worth of supplementary shares and financing. The restructuring was the largest on Shanghai’s stock exchange in 2017.
Another deal for Citic Securities, led by Beijing-based chairman Zhang Youjun, was helping the Agricultural Bank of China in the private placement sale of 25 billion shares worth Rmb100 billion to seven key investors. The transaction, which was implemented between March and July, was the largest private placement in A-share history; among the key investors were Central Huijin Investment and the finance ministry.
ABC says the sale helped it to replenish its common equity tier 1 capital and boost its capital adequacy. Maintaining the share price above Rmb3.97 per share was not always easy as the placement occurred during extreme volatility caused by the US-China trade conflict, according Citic. The Shanghai A-share market fell 7% during the month of June.
China’s Best Corporate and Investment Bank for Equity Capital Markets — Cross-Border: CICC
Even though China International Capital Corp was not the leader in the league table for offshore fund-raisings of Chinese enterprises, it was the most successful among Chinese brokerage houses.
According to Dealogic, CICC notched up 16 initial public offerings between June 2017 and May 2018, helping Chinese companies to raise $1.9 billion. While that is far fewer than league table leader Morgan Stanley, the Beijing-based brokerage house was the only Chinese firm in the top 10, and ranked ninth in the league tables for the period.
Founded in 1995 and led by chief executive Bi Mingjian, the bank is as a joint venture between Morgan Stanley and China Construction Bank. Its top deals in the last year include helping China Everbright Bank in its HK$31 billion ($3.9 billion) secondary share sale, the largest such H-share transaction in 2017, and helping Postal Savings Bank of China in a $7.3 billion preference share sale in Hong Kong.
CICC’s other successes include helping Taiwanese electronic components manufacturer FIT Hon Teng, a subsidiary of Taiwan’s electronics assembling company Hon Hai Electronics, in a HK$2.7 billion IPO in Hong Kong. The IPO was the largest by a Taiwan-based firm in recent years. It was also joint bookrunner for Chinese fintech firm Qudian’s $1 billion IPO on the New York Stock Exchange, and helped Israeli cosmetics laser manufacturer Sisram Medical in a $125 million IPO in Hong Kong, and ZhongAn Online P & C Insurances $1.75 billion IPO in Hong Kong.
CICC’s biggest IPO in recent years, however, came after the May 31 cut-off date for the awards period. It succeeded in helping Chinese mobile phone brand Xiaomi with a $5.4 billion IPO in Hong Kong on June 29 – the biggest IPO in Hong Kong so far this year.
China’s Best Corporate and Investment Bank for M&A — Domestic: CICC
According to Dealogic, China International Capital Corp leads the league tables when it comes to domestic M&A advisory, with a total of 74 deals done between June 2017 and May 2018. The deals, worth a combined $160 billion, give it a big lead over the next mainland rival, Citic Securities, which in the same period advised 56 deals with a collective valuation of $101 billion.
Among the names that CICC advised are Cosco, Alibaba, Ant Financial, Haier, China National Chemical, China Life Insurance and Tencent Holdings.
Chief among last year’s successes was its role in advising expressway operator China Merchants Expressway Network & Technology Holdings on its merger with Huabei Expressway, a deal that resulted in an initial public offering of the combined company on the Shenzhen Stock Exchange with a valuation that reached as high as Rmb100 billion ($14.7 billion).
CICC’s leadership is particularly proud of the bank’s role last year in helping mobile phone company China Unicom to come up with a mixed ownership plan that sold down equity previously controlled by the central government. This was achieved by selling A-shares from the unit listed on the Shanghai Stock Exchange and red chip shares from the unit listed on the Hong Kong Exchange.
The process, which began in 2016 and was completed last year in November, involved selling equity to a select group of investors, as well as the creation of the largest share incentive plan ever in the history of state-owned enterprises. As part of the process, CICC also worked with China Unicom to grant a total of 848 million shares of restricted stock worth Rmb3.2 billion to 8,000 employees.
China’s Best Corporate and Investment Bank for M&A — Cross-Border: CICC
China International Capital Corp leads Dealogic’s league tables when it comes to cross-border M&A advisory among Chinese banks, completing a total of 11 deals with a combined value of $18.5 billion.
CICC is widely known in the industry as China’s most international investment bank.
Founded in 1995 as a joint initiative by China Construction Bank and Morgan Stanley, it is also China’s oldest joint-venture investment bank and the first in China to emulate the practices of global investment banks. In the last year in particular, CICC advised on a number of landmark offshore deals.
The deal that stood out in particular last year was when its bankers acted as joint financial advisers for Yanzhou Coal Mining on its acquisition in Australia. Yancoal Australia, a subsidiary of the Chinese coal giant, successfully completed its $2.5 billion equity issuance on the ASX to fund its acquisition of Coal & Allied from Rio Tinto in September last year. The issuance was the first ever ASX market equity-raising conducted by a Chinese investment bank – an exercise that required CICC to meet all Australian regulatory and compliance procedures.
Alongside this main transaction, CICC helped Yancoal to sell 49% of one of Coal & Allied’s key mining assets, Hunter Valley Operations, also known as HVO, to Glencore. Glencore further subscribed to $300 million in Yancoal’s equity issuance and became a strategic investor of Yancoal.
The deal was the largest in size among Chinese companies’ acquisitions in Australia since 2014 and the second-largest in size in Australia in 2017.
China’s Best Corporate and Investment Bank for State-Owned Enterprises: Bank of China
Bank of China was top of the league table for loan bookrunners among all Chinese banks and ranked second among debt capital market bookrunners for the year to May, according to Dealogic. The bank helped its clients – the majority of them state-owned conglomerates – to raise $54.4 billion in bond financings and $51 billion through loans.
BOC points out, for instance, that it is an issuing partner and adviser to the Beijing State-Owned Capital Management Centre, which operates under the State Asset Supervision and Administration Commission. SASAC controls all central government-owned assets, including controlling stakes in large state-owned enterprises, and the Beijing centre helps the commission manage the assets of Beijing-based SOEs.
According to the bank, it began issuing the first phase of a series of 2017 mid-term notes on behalf of companies associated with the centre in April. The five-year notes offered a coupon of 4.48%, but were impacted by market volatility caused by the US-China trade conflict as investors’ risk aversion rose and bond market yields declined then subsequently rose rapidly.
BOC bankers also point out they are lead underwriters for various bonds sold to global investors recently by Central Huijin Investment, the Beijing-based state-owned asset manager that controls majority stakes in the nation’s largest financial institutions, including the Industrial and Commercial Bank of China and Bank of China itself.
In April, for instance, the bank successfully helped Central Huijin raise $2.4 billion through the sale of third and fourth interim notes for 2018 to various foreign investors via Bond Connect in Hong Kong. The sales marked the first global offering by Central Huijin via the Bond Connect.
China’s Best Corporate and Investment Bank for Privately-Owned Enterprises: Huatai United Securities
Huatai United Securities, a mid-sized brokerage house, specializes in restructuring and mergers and acquisitions, especially for private enterprises.
Since 2004, Huatai has operated a fully functioning M&A business, helping more than 200 private enterprises to conduct M&A both onshore and offshore. The firm has a $2 billion M&A fund, which it uses to co-invest with its clients.
The firm, however, performed well across the board by serving private enterprises. It ranked fifth in the league tables in equity capital markets for China for the year to May 2018, according to Dealogic, and was a lead or co-sponsor for 37 deals with a total value of $6.9 billion in funds raised.
Led by chairman and president Zhou Yi, Huatai is particularly proud of the fact that it can beat China’s brokerage houses in winning deals. Nanjing-based Huatai beat out a number of rivals – among them Citic Securities, China’s top brokerage house – in winning the rights to advise Nasdaq-listed Chinese internet security firm Qihoo 360 Technology to delist and privatize in a $9.3 billion deal in 2017 and to relist in Shanghai in February this year with a valuation of $62 billion.
According to Chinese financial data provider Wind Information Technology Co, Huatai rose from 10th place in the equity capital market leagues in China to fifth place in 2017. In the first six months of 2018, according to Wind, Huatai ranked second with Rmb91.3 billion ($13.4 billion) in funds raised.
Besides helping Qihoo 360, Huatai has led the market in advising half a dozen other Chinese technology companies delist from the US markets and to relist with much higher valuations back in China.
Among them was Chinese online advertising agency Focus Media Holding Co, which in 2013 was delisted from Nasdaq and subsequently privatized in a deal worth $3.8 billion, and then relisted in Shenzhen in 2015 with a market value $21.8 billion.
China’s Best Corporate and Investment Bank for Financial Institutions: China Merchants Bank
China Merchants Bank underwrote a total of Rmb33.86 billion ($5 billion) of various debt capital market products for other financial institutions between June 2017 and May 2018, putting it top of the league tables among Chinese banks and brokerage houses, according to financial data provider Wind Information Technology.
One noteworthy example was CMB’s success in helping distressed-asset manager Huarong Asset Management in issuing a 10-year bond last year with an annual coupon of 4.95%. The bond raised Rmb10 billion, helping Huarong improve its capital structure and reduce its overall financing costs.
CMB also helped leading life insurer China People’s Life Insurance to issue Rmb12 billion-worth of 10-year bonds with an annual coupon of 5.05% last year to strengthen its capital base and reduce debt.
Besides state-owned financial institutions, the bank also helped a number of privately held firms to raise funds from the bond markets, chief among them Gitzo Consumer Finance, which sold Rmb1.5 billion-worth of bonds with a three-year tenor and an annual coupon of 6.74%.
Overall, CMB ranked sixth in the debt capital market league tables, according to Dealogic, helping clients in 184 transactions with a total value of $43 billion between June 2017 and May 2018.
Led by chief executive Ma Weihua, CMB has long been known as the most innovative among Chinese banks. It employs a team of more than 4,000 information technology engineers in offices across China – staff who build online systems for the bank as well as for its leading clients.
By the end of 2017, the bank had more than 70,000 employees and operated a network of more than 1,800 branches, including six overseas.