Boeing drew strong investor support for its potentially protracted corporate turnaround by raising US$24.25bn from a record equity and equity-linked offering, the largest primary ECM deal by a US company. The massive capital call on investors ended years of speculation that had intensified in recent weeks and enables the struggling aircraft maker to slash debt and bolster its liquidity while it seeks to overcome long-running safety and quality concerns and production delays and start to address an estimated seven-year backlog of orders. The proceeds could also help Boeing fend off the recent threat from credit rating agencies to cut its investment-grade ratings to junk. “The big takeaway for me is that in the right situation, for the right company, the ability to do a raise in size is there," one senior ECM banker said. “[The banks] haven’t really had to put these tools to the test since Covid-19.” After a weekend wall-cross followed by one day of marketing, Boeing on Monday sold US$16.1bn of common shares and raised another US$5bn from an equity-linked three-year mandatory convertible security. Boeing later confirmed the bank syndicate behind the offering had exercised a 15% greenshoe on the share sale for another US$2.4bn of proceeds. The banks also confirmed they had exercised the 15% greenshoe on the mandatory for another US$750m, taking the total haul from the exercise to US$24.25bn, the biggest primary raise on record by a US company topping Citigroup's US$21.1bn recap in 2009. The only larger equity offerings globally in the past 15 years are Petrobras' US$69.8bn secondary offering in 2010 of which US$23.2bn was placed in the market, Saudi Aramco's US$29.4bn IPO in 2019 and Alibaba's US$25bn NYSE IPO in 2014. A syndicate comprising 11 bookrunners led by Goldman Sachs, Bank of America, Citigroup and JP Morgan priced the base offering of 112.5m shares, or about 15% of Boeing, at US$143 each, a 7.7% discount to the close on October 25. The sale was upsized by 25% from 90m shares at launch and, with the shoe, added more than 20% to Boeing's outstanding shares. The highly anticipated offering closed multiple times covered. The banks allocated 55% of the shares to the top 10 accounts and 80% to the top 25. The mandatory convertible priced at a 6% dividend and a 20% conversion premium versus initial price talk of 6%–6.5%, up 17.5%–22.5%, later tightened to 5.75%–6%, up 20%. The mandatory was six times covered with allocations skewed to mutual funds and outright investors. The syndicate told investors from the outset the stock sale could be upsized but the mandatory would not, reflecting Boeing's sensitivity to the cost of paying the dividend on the latter as the company has not paid a dividend for four years. Boeing shares fell 2.8% to US$150.69 while the equity raise was in the market on Monday, fading late in the session despite widespread anticipation of the offerings and the stock already being down 40% this year. Reflecting the willingness of investors to back Boeing's turnaround, the shares rose to US$152.98 on Tuesday and to US$154.29 on Wednesday, though they fell back to US$149.31 in Thursday's weaker broader market. As a result, the offering delivered windfall profits of roughly US$800m to those that bought shares in the stock sale. Another banker close to the deal defended the wide discount, arguing it accounted for the upsize and reflected Boeing's eagerness to ensure a positive aftermarket so the greenshoes could be exercised to collect extra proceeds. Boeing was also keen to reward its long-suffering shareholders, the banker said. Saturday marketing Both legs were oversubscribed at launch following a confidential marketing effort led by Goldman Sachs that started on Saturday to give the syndicate greater confidence in the level of demand. Participation in the wall-cross was confined to mutual funds and other existing investors, and did not include any sovereign wealth f

German residential solar panel installer Enpal's long-awaited debut public ABS, Golden Ray 1, which priced late on Thursday, was hailed as a groundbreaking success that sets the scene for an entirely new European ABS asset class – one that will help to finance the transition to low-carbon energy while providing ABS investors with the green bonds that they have been sorely lacking. “It’s a big step for us, but it’s an even larger step for renewable energy as a whole," said Gregor Burkart, who leads the refinancing division at Enpal in Berlin. "This transaction is clearly a landmark deal but it also opens up access for businesses that are active in the renewable space to look at securitisation for financing." The five tranches offered by bookrunners Citigroup (sole arranger), Barclays, Bank of America and Credit Agricole were comfortably oversubscribed – coverage on one of the mezzanine tranches peaked at more than nine times – but an entirely new type of collateral is never an easy sell, no matter how far in advance it has been trailed or how easily it ticks the right sustainability boxes. And it remains unclear how quickly the European solar ABS market will develop and how large it will become, given the fragmentation of the residential solar industry in Europe. Scaling up "We can expect more activity in the solar ABS space in Europe after this deal," said Armin Krapf, senior credit officer at Moody's, one of the two ratings agencies on the deal. "There have been initiatives across Europe to support the expansion of solar panels. But in securitisations you need a minimum volume." In order to achieve the critical mass necessary to support a fully fledged securitisation market, observers say there needs to be consolidation among Europe's solar panel installers. In the US, where solar securitisation has been around since 2013, the home solar finance market has long been dominated by a handful of large companies. "In Germany, there are quite a lot of small players," said Krapf. "Enpal is standing out in terms of its size compared to other originators. There are a number of competitors, but they are all still quite small. There might be two or three other players that could reach a certain size via M&A." As a result, Krapf said there may only be one or two more deals in the next two to three years. "Southern Europe could also see consolidation and a player with sufficient size," he said. But there is confidence that the market will grow. "I expect solar ABS to become a huge asset class in Europe because loan origination is growing fast," said an investor who followed the Enpal deal. Picky investors For Enpal, the challenge of being the first to enter the market was compounded by the fact that the characteristics of its €240m deal and the collateral were not to every European ABS investor's taste. The offered senior notes, for instance, were Double A rated, not Triple A, and the size of the tranche at €149.2m is likely to limit its liquidity from the start. The underlying solar loans, meanwhile, have a longer term than most other assets that are already securitised in Europe, and historical data are limited. "The challenge is to set up a new investor base, especially on the senior side," said a banker close to the deal. "They will find any excuse: it's small, it's this, it's that ... the most conservative investors I would expect to wait until the next one." The investor agreed that the small size of the deal would make it difficult to digest. This was not helped by the fact that the senior notes were split between a Class A1 tranche guaranteed by the European Investment Fund, part of EIB Group, and benefiting from a Triple A rating, which was preplaced with ING, and a Double A rated Class A2 tranche that was offered to investors. "It wasn't necessary, in my view, and it's a challenge for asset managers that can only invest in senior tranches," said the investor. The benefits of the

Mizuho Bank, MUFG and Sumitomo Mitsui Banking Corp are looking to scale up their capabilities in India amid strengthening ties between the world’s fourth and fifth-largest economies. The Japanese mega banks are looking to capitalise on the robust growth they have achieved in the country in the past few years and are increasing their product offerings while also eyeing opportunities in capital markets. “We are looking to grow our product capability, headcount, and our customer base in India as the country is seeing a golden period,” said Piyush Agarwal, senior managing director of Mizuho Bank's Indian corporate banking department. “We want the advances and deposits to grow even faster than before [and are] looking at both inorganic and organic growth opportunities.” Mizuho Securities is hiring debt capital market specialists as it makes that push and MUFG is awaiting approval to set up a local DCM business. “Once operational, we will be able to finance M&A through all channels and in the most cost-efficient way,” said Shashank Joshi, deputy CEO of MUFG India. “As a bank which is playing in size, we want to have the rupee capabilities as the rupee market is becoming very liquid.” India’s inclusion this year in global bond indices and a booming private credit market, combined with its strong economic growth, have spawned a gold rush among debt market participants, especially international ones. MUFG is processing internal approvals for an asset-backed securitisation business in rupees and US dollars and is targeting its first deal this month, Joshi said. India's ABS market is expected to grow rapidly as it gives banks an alternative funding route when deposits are trailing credit growth. Joshi said MUFG is focusing on lending to large conglomerates and pursuing more complex transactions, such as structured deals, M&A financing and financial sponsor-driven deals. In the past, the bank had been more focused on state-owned enterprises. It's a similar story at SMBC and its non-banking financial company SMFG India Credit. “SMBC plans to expand its business by strengthening highly profitable products such as project finance and LBOs, as well as offshore business, while SMFG India Credit, which provides financial services to [small and medium-sized businesses] and individuals as a non-bank, plans to enhance its business in rural areas and housing finance, as well as by bolstering its product portfolio and digital solutions,” said Hiroyuki Mesaki, country head and CEO for India at SMBC. Besides supporting the rupee funding needs of Indian blue chips and Japanese customers operating in India, the bank offers foreign currency-denominated structured products and finance for projects, infrastructure and real estate to corporates with an increasing focus on sustainability and ESG principles, he said. Mizuho is also focusing on providing acquisition, structured and project finance for customers in India and has recently hired people to work on such deals. Mizuho Financial Group's four units – Mizuho Bank, Mizuho Securities, Mizuho Global Services and Mizuho Leasing – employ 1,000 people in India, up from fewer than 500 three years ago. MUFG's headcount has risen to 4,000, including MUFG Pension and Market Services, earlier named Link Group, which it acquired in May. SMBC's headcount in India has grown by 12% over the last fiscal year to almost 400. Committing more Japanese banks are expanding in India through multiple means, including taking stakes in local intermediaries, committing more capital or opening branches in Gujarat International Finance Tec-City, an offshore financial centre in prime minister Narendra Modi’s home state. In August, MUFG invested Rs27.99bn (US$333m) in DMI Finance, a digital financial services business. In February, Mizuho spent Rs12bn on a 15% stake in small business lender Kisetsu Saison Finance (India), a subsidiary o

China’s ban on PwC's local unit has stalled the fundraising plans of Chinese issuers, including IPOs and follow-ons. The China Securities Regulatory Commission is encouraging some issuers to replace PwC Zhong Tian, the accounting and consultancy firm’s Chinese unit, with other auditors before their listings can proceed, according to people with knowledge of the matter. But some issuers cannot press ahead with follow-ons as PwC Zhong Tian is unable to issue comfort letters regarding their financial condition and certain information related to the offerings, said other people familiar with the situation. The ministry of finance and the CSRC on September 13 fined PwC Zhong Tian Rmb441m (US$62m) for its auditing work between 2018 and 2020 for failed property developer China Evergrande Group and banned it for six months. PwC's Guangzhou branch was ordered to be shut down. The MoF said in a statement that PwC Zhong Tian and its Guangzhou branch were aware of major errors in the accounts of Evergrande's main operating unit, Hengda Real Estate Group, but did not report them and published "inappropriate" auditing opinions. It said PwC came to false conclusions, lost its independence and failed to identify and flag errors in the financial reports. The ban has left the IPOs in limbo for some of PwC Zhong Tian's clients. According to four sources with knowledge of the matter, the CSRC has suggested to some IPO candidates that they switch auditors to ensure a smooth listing. “Compared with listed companies, the impact of changing auditors for private companies is definitely smaller. I’m not surprised the CSRC is telling them to do so,” said one of the sources. “Even if the CSRC doesn’t ask the issuers, they may still want to change the auditors given deals handled by PwC are likely to be put under a microscope by the regulator in the future,” said another source. The CSRC had not responded to questions from IFR at the time of going to press. The US$50m–$100m Nasdaq IPO of insurance broker Yuanbao is one of the deals affected, according to the sources. The company started pre-marketing on September 19, just a few days after the PwC ban, and was originally aiming to wrap up the transaction in October. PwC Zhong Tian is Yuanbao’s accountant and audited the consolidated balance sheets of Yuanbao and its subsidiaries as of December 31 2022 and 2023, according to Yuanbao’s IPO filing. Yuanbao is now changing auditor, which is expected to delay its IPO by four to six months, said the people. Yuanbao could not immediately be reached for comment. Goldman Sachs, Citigroup and CICC are leading the transaction. PwC Zhong Tian’s ban has also affected some US-listed Chinese issuers considering follow-on offerings on the back of the recent improved sentiment towards Chinese stocks. If companies want to sell shares within 135 days after the last audit cut-off date, they need a negative assurance comfort letter regarding their financial condition. “Some issuers can’t get the comfort letters from PwC Zhong Tian since their audit business is suspended, and hence can’t push ahead their equity fundraising plans,” said one of the sources. Asked by IFR how PwC Zhong Tian’s ban has affected Chinese issuers’ fundraising plans, PwC said: “It’s an ongoing regulatory matter and we are working with the relevant stakeholders to support our clients' business needs.”

Danish transport and logistics company DSV pulled in one of the biggest order books in the euro investment-grade corporate market for its €5bn six-tranche deal on Wednesday, which was itself the joint biggest euro corporate offering of the year. The deal, the proceeds of which will go towards funding DSV's €14.3bn acquisition of Deutsche Bahn's logistics arm, DB Schenker, netted books of more than €29bn. There have been few transactions with bigger books, though in recent years they include AB InBev’s €13.25bn six-part deal in 2016, which had orders of more than €31bn, and a Medtronic €7bn six-tranche offering in 2019, which got €30.45bn of demand, according to IFR data. Teva also got more than €30bn of orders in 2016, when it was still investment grade rated, for a €4bn deal. The DSV deal came less than a week before the US election and when rates have been rising – arguably the two biggest risks that investors had pinpointed at the start of the year – in a sign of how the technicals underpinning the credit markets have held up. “Investors are simply continuing to want to deploy cash and put it to work in this asset class,” said a lead banker. “Investment-grade spreads are tight but still offering room for performance.” DSV, which is rated A3 (stable) by Moody’s and A– (negative) by S&P, issued fixed-rate tranches comprising €650m two-year, €1bn four-year, €1.25bn six-year, €750m eight-year and €750m 10-year bonds, alongside a €600m two-year FRN. The deal is the biggest this year alongside Siemens' four-part trade in February, which got considerably smaller books of more than €15.8bn. A key difference was the make-up of the tranches. Siemens issued bonds ranging from a long four-year to a 20-year. DSV’s deal was much more compressed, as the company sought to lock in funding without extending its maturity profile given the uncertain rates environment. “To achieve this volume, the natural wisdom is to go longer,” said James Cunniffe, head of corporate and structured debt syndicate at HSBC, a lead manager on the deal alongside BNP Paribas, Danske Bank and Nordea. “We were asked to narrow the maturities and we thought that we would be able to deliver that due to the strength of the management team, the scarcity of acquisition funding in euros and the wall of liquidity in the broader market.” The approach worked, with all six tranches landing comfortably inside fair value. The first lead banker put the new issue concessions at –3bp on the four-year; –5bp on the two-year tranches and the six-year bond; –10bp on the eight-year; and –15bp on the 10-year. Keeping the faith DSV put the strong demand down to investors' faith in its expansion strategy. “The reception to our bond issuance is validation that investors believe in DSV’s strategy and the acquisition of DB Schenker,” said Michael Ebbe, group chief financial officer. But attractive pricing likely played a large part too. “It’s a weak Single A name but it’s trading wide to some Triple B plus names,” said Roberto Coronado, senior portfolio manager at PineBridge Investments. “The curve has not done that well recently due to the recent acquisition and higher leverage, but also because the market was expecting [the] issuance." DSV's secondaries widened after the acquisition was announced in September. Its March 2031s, for example, which were trading at plus 92bp on September 11, ahead of the announcement, were bid at plus 109bp on Tuesday, the day before the new deal. The value on offer in DSV’s latest trade was brought into sharp relief by comparison with the other big acquisition-related debt to come out of Denmark this year – Novo Nordisk’s €4.65bn four-part offering in May, which saw final books of more than €8.6bn