China’s acquisition financing market came of age in 2013, with event-driven offshore deals dominating loan market activity during IFR’s review period. Citigroup led that trend, underwriting, structuring and distributing even the most challenging of transactions.
With its integrated investment banking advisory and capital markets platform, Citigroup led the highest-profile acquisition processes – both inbound and outbound – and helped syndicate multi-billion dollar financings to back the takeovers.
“Citi continues to be the most active international bank in the Chinese loan markets. Our relationships and years of experience in this market, combined with the market leading structuring and distribution platform, make us the bank of choice to lead complex syndicated transactions, especially acquisitions,” said Benjamin Ng, head of debt syndicate and acquisition finance for Asia.
The most complex of them across the entire region was the US$1.725bn loan backing the leveraged buyout of Chinese display advertising firm Focus Media Holding, IFR Asia’s Loan of the Year.
Citigroup was in the driver’s seat from the beginning, as M&A adviser, one of three original bookrunners, and agent bank. Despite the challenges, six more banks joined the deal as bookrunners, while nine more came on in general syndication.
The deal yielded more than just a successful syndication. Focus Media’s new owners returned to the market less than six months later to add another US$500m of debt to the company and pay themselves a handsome dividend.
Despite a cut in pricing and the withdrawal of three lenders from the original deal, Citigroup, as sole co-ordinator, found ample appetite among other lenders and closed the exercise within six weeks of launch in the world’s fastest dividend-recap exercise.
Citigroup guards its balance sheet far more closely than it did years ago, but its resume of Chinese deals shows it has the clout to support key clients.
The US bank was the sole M&A adviser to CNOOC on its US$15.1bn acquisition of Canada’s Nexen Energy. It offered to underwrite the entire US$6bn bridge for the Chinese oil-and-gas firm.
Citigroup was also among 11 lenders on CNOOC’s US$3bn dual-tranche loan to fund the acquisition of a 40% stake in Queensland Curtis LNG project in Australia. Citigroup was the facility agent on that.
It was one of five original underwriters on the US$8bn financing for Alibaba Group and its involvement in a US$1.5bn financing for Huawei Technologies meant it was bookrunner on the top five US dollar loans from China during the review period.
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