Sharp focus
Global financial markets experienced plenty of volatility in 2023, complicating dealmaking, but HSBC remained focused, winning several sole and repeat mandates as well as arranging roles on event-driven and ESG loans. For those reasons, HSBC is IFR Asia’s Loan House and India House of the Year.
Heightened volatility stemming from rising interest rates, geopolitical tensions, banking sector concerns in the US and a real estate crisis in China made borrowers cautious about raising debt in general and also put the brakes on M&A and leveraged buyouts.
Against such a backdrop, HSBC produced an array of deals, including for debut and repeat borrowers, and also showed its syndication prowess with successful distribution into different pools of liquidity.
“Against a volatile market where financing deal flow declined whilst competition continued to intensify, HSBC has continued to differentiate itself from peers with leadership by spearheading innovative solutions, expanding cross-border distribution strategies, and demonstrating unwavering underwritten support,” said Ashish Sharma, co-head of leveraged acquisition finance and head of loan syndications for APAC.
One such example was a US$1.9bn-equivalent amendment and extension of a Term loan B for international schools operator Nord Anglia for which HSBC was the sole lead on the Asian syndication. The bank followed it up with a US$300m add-on in June and another US$2.2bn-equivalent repricing in September.
In March, HSBC acted as one of the bookrunners for a US$1.88bn-equivalent TLB backing the merger of Hong Kong-based business services companies Tricor and Vistra. The borrowing was the first TLB to include a Hong Kong dollar-denominated tranche and the largest such multi-currency financing for an Asian credit.
Private equity firm BPEA EQT was behind both leveraged financings, and HSBC arranged another for it in November, wrapping up a US$380m loan in Asia for the LBO of IMG Academy, which BPEA and Nord Anglia were jointly acquiring. The loan marked a rare instance of a non-Asian business tapping the Asian leveraged finance market.
“We remained steadfast in driving our ambition in propelling Asia into a multi-faceted loan hub and a key distribution base for clients across regions and products and brought significant Asian liquidity into cross-border deals,” said Rachel Watson, co-head of leveraged acquisition finance for APAC.
It was in India that HSBC performed best, bagging key roles on leveraged financings, including a US$755m refinancing and dividend recapitalisation of another BPEA portfolio firm, Sagility Healthcare (formerly HGS Healthcare), and the largest such from the country.
Alongside other banks, HSBC also led loans in industries rarely seen in the syndicated market, such as a US$1.2bn loan to support pharmaceutical company Biocon Biologics’ purchase of biosimilar product assets from US-based Viatris and a US$257m loan for Blackstone’s buyout of International Gemological Institute, a certifier of diamonds, gemstones and jewellery.
Joint roles on borrowings totalling US$7.45bn-equivalent for conglomerate Reliance Industries and a US$130m refinancing and dividend recapitalisation for Parksons Packaging also added to HSBC’s roster.
The bank stood out, however, for the deals it led on a sole basis in India, a market where such mandates from state-owned borrowers are hard to come by. State Bank of India, Bank of Baroda and Canara Bank, among the largest state-owned lenders in India, and non-bank lender Shriram Finance relied on HSBC for repeat borrowings.
Other large, noteworthy and widely syndicated financings included Australia-based data centre operator AirTrunk’s A$4.62bn-equivalent (US$3.02bn) sustainability-linked loan, energy infrastructure business APA Group’s A$1.25bn borrowing, mining services contractor Thiess Group’s A$1.5bn-equivalent facility linked to its transition away from coal and a A$1.4bn financing for supermarket operator Woolworths. Singaporean agribusiness group Wilmar International’s US$1.7bn borrowing, a US$1.2bn financing for Thailand’s SCB X and a US$650m facility for Vietnamese conglomerate Masan Group, marking its largest loan, also added to HSBC’s flow of successful deals.
In Hong Kong, HSBC was sole structuring adviser on a HK$25.2bn (US$3.23bn) borrowing for Chow Tai Fook Enterprises that funded the conglomerate’s buyout of NWS Holdings – one of the largest loans for a take-private deal in the territory. HSBC also led on a sole basis impressive debuts for borrowers such as electric vehicle manufacturer Sunwoda Automotive Energy and renewable energy developer Beijing Energy International Holding, which raised green financings.
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