As refinancing needs waned in Singapore, new money deals stemming from M&A transactions and real estate trusts helped mitigate a big drop in loan volumes. For its leading role in supporting these transactions and for bringing foreign borrowers to the Singapore market, DBS Bank is IFR Asia’s Singapore Loan House of the Year.
DBS Bank led seven of the 10 largest deals done in Singapore, underwrote a slew of complex transactions, led the way in M&A financing, brought new European issuers to the Singapore loan market and played a leading role in many of the year’s REIT financings.
“DBS was involved at the highest levels in almost every prominent loan in Singapore,” said DBS managing director, syndicated finance, Boey Yin Chong. “Against a backdrop of market volatility and initial lack of volume, DBS repositioned itself as the lead in the Singapore loan market by providing underwriting and capital. We arranged and closed some of the largest and highest-profile loans to widen the breadth and depth of the Singapore loan market.”
Much of the success of DBS came from its willingness to underwrite large loans. This willingness helped issuers raise funds in a challenging market where liquidity had fallen due to regulatory constraints and the withdrawal of European lenders.
More importantly from the bank’s point of the view was that taking on underwriting risk was one of the keys to making money in year of falling volumes. Singapore loan volumes endured a double-digit drop through the review period as global economic uncertainty, especially the European sovereign debt crisis, hindered deal flow.
The bank’s underwritten commitments included the S$9bn bridge loan that backed Thai Beverage PCL’s bid for Fraser & Neave, state-linked M+S’s S$5bn loan, Marina Bay Sands’ S$5.1bn refinancing, as well as being sole underwriter on the S$2.25bn loan that backed YTL’s acquisition of genco Seraya.
DBS was all over the YTL-Seraya trade from beginning to end. The bank solely provided the bridge financing that backed YTL’s acquisition of Seraya and then co-ordinated and backstopped a takeout facility that was sold down later.
On the Marina Bay Sands deal, DBS was one of the three global co-ordinators to underwrite the loan. DBS was the facility and security agent on the transaction, which attracted 24 banks in general syndication, resulting in 1.6x oversubscription.
Beyond putting its balance sheet at risk by underwriting transactions, the bank also proved to be a master of execution, successfully syndicating a wide spectrum of loans, including REIT deals, ship financings and leveraged transactions.
DBS was one of the two leads on the S$375m deal for Cache Logistics Trust, which, with 17 lenders joining, was one of the most widely sold down REIT transactions.
In the same month, the bank sealed a S$273m ship financing for Lewek Constellation, a unit of Ezra Holdings. The financing, which benefited from a guarantee from the parent company, drew an interesting mix of financial institutions, including Caterpillar Finance and a host of Asian banks.
DBS also provided leveraged loans to back privatisations. The bank was one of two leads on the US$65m bridge loan that partially financed the privatisation of Singapore-listed Kian Ann Engineering. DBS was also sole lead on a S$100m facility for Meiban.
In another example of the smart structured lending that characterised the bank’s deals, DBS was a bookrunner and underwriter on the S$168m multi-tranche facility that supported Ascendas Hospitality Trust’s IPO.
While these event-linked trades provided new-money volumes to the Singapore loan market, commodity sector deals were a constant. This was yet another area where the bank not only excelled, with 10 deals to its credit, but also developed by bringing in new issuers.
Recognising the growing importance and value of commodity names, DBS introduced European issuers Gunvor and Duferco to Singapore loan investors.
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