Deal Awards - ANZ winners: FinanceAsia's Achievement Awards 2022

When we called for submissions for our FinanceAsia Achievement Awards 2022 back in September last year, we could not have imagined that events would have moved so fast. 

Covid-19 recovery, supply chain disruption and global geopolitical shocks have all been the hallmark challenges of 2022, and each is set to intensify further in 2023.

The themes that emerged in this awards year were not simply resilience – the ability to double down in a crisis, after all, is part of sound financial management everywhere – but the capacity to seize opportunities, too.

Now in our 26th edition, the quality of the awards submissions improves year on year, and more than 600 high-calibre case studies and presentations showcased the very best from Asia Pacific’s financial markets, displaying ingenuity in the face of unprecedented headwinds. 

Those investors, asset owners and financial houses that showed a talent for not only sitting out a crisis but turning it to their advantage, were the kind of submissions that won our prestigious awards. 

In addition to congratulating the winners, we would also like to thank the jurors and advisors who helped us with decision on the banks, brokers, law firms and rating agencies that were shortlisted and selected. 

They were:

Tony Adams – Managing partner, R66 Capital 

Sandeep Aggarwal – Independent strategic-cum-financial advisor

Agnes Chen – Managing director APAC, CSC Global

Sandy Gilles – Market education consultant,  First Metro Securities

BK How – Regional managing director, Ofisgate

Philip Lee – Corporate, M&A, international capital markets partner, DLA Piper

Richard Liao – Chief executive officer, Hwahsia Glass

Patrick Ng – Group treasurer, RGE Group

David Morton – Non-executive chairman, Helsinki Foundation Asia Pacific

Vivek Sharma – Head of international clients group, Nuvama Group

Rocky Tung – Director and head of policy research, Financial Services Development Council (FSDC)

Sangeeta Venkatesan – Non-executive director and investor, FairVine Super; former chief operating officer, Commonwealth Bank of Australia and Nomura

Read on for details of the winners we selected for the Deal Awards Australia and New Zealand category.

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BEST DEBT FINANCE DEAL (INCLUDES SECURITISATION AND STRUCTURED FINANCE)

Brookfield and Morrison & Co acquisition of Uniti Group

MLAUB: Barclays, Commonwealth Bank of Australia (CBA), HSBC, Mizuho, MUFG, Natixis, Westpac

Other participants: Bank of China, Bank of Taiwan, BNP Paribas, China Everbright, Credit Agricole, E-Sun Commercial Bank, Export Development Canada, Hua Nan Commercial Bank, ICBC, KEB Hana Bank, Korea Development Bank, NordLB, SMBC, Taiwan Business Bank

Advisors: Allens, Claytons Utz

The lenders impressed our judges with this submission, which showed a capable group steering through difficult deadlines in a challenging regulatory environment to eventually deliver competitive pricing for the customer.

The objective was to raise funds for the acquisition of Uniti Group – the second largest fibre-to-the-premises provider in Australia – by Morrison & Co and Brookfield Asset Management, via a A$3.7 billion ($2.6 billion) scheme of arrangement.

Against a difficult backdrop of increasing interest rates, Westpac and the lending team expertly negotiated the extended timeline, which was driven by approval requirements from corporate regulator, the Australian Securities and Investments Commission (ASIC), and investment regulator, the Foreign Investment Review Board (FIRB). 

Add to this the higher leverage of the transaction for lenders (who were unable to view the transaction as core or core-plus infrastructure) and you get real challenge.

“A sizeable deal with a number of international banks as lenders,” judges said.  “We can only imagine the challenges caused by these regulatory issues.”

Ultimately, the MLAUB group’s strong understanding of the sector and their structuring capabilities led to a highly successful deal within timeline. The syndication closed in September, shortly after the scheme was implemented.

The acquisition enables Uniti Group – which offers significantly higher bandwidth compared to main rival NBN – to expand further its provision of fibre network connection to households across Australia. 

Viewed as a ‘green choice’ when compared with wireless due to  its six to seven times lower consumption of energy, fibre connection is seen as a long-life asset with capacity to continue to service Australia’s bandwidth needs.

BEST HYBRID DEAL (INCLUDES EQUITY-LINKED)

Ampol’s A$500 million hybrid note issuance

MLAUB: MUFG

Advisors: Herbert Smith Freehills

This hybrid received strong support from the domestic market, highlighting the continued maturation of Australian debt capital markets.

The important deal was Ampol’s second hybrid issuance in the Australian wholesale market in 12 months. In December 2020, the fuel-focussed firm issued A$500m subordinated notes, convertible to ordinary shares.

Judges were impressed not only by the bookbuild’s success, but by how this type of issue – now relatively rare in Australia – went ahead in the face of regulatory headwinds. 

Tough new rules introduced in 2021 have meant that Australia’s hybrid market is a shadow of its former self, dampening what was once worth tens of billions that enjoyed regular issue.

Hybrid shares are really debt, but as Australian Securities Exchange (ASX)-listed instruments, they behave like equity. The structures have been caught in the net of a government move to tighten credit, but demand remains high since they offer a dependable, long-term franked income stream that provides an inflation hedge.

Aussie corporates are increasingly raising hybrid funds directly from institutional investors in the unlisted market, where disclosure requirements are less stringent. Ampol’s hybrid was a masterpiece of timing and good execution.

On the back of strong investor engagement following a two-day virtual roadshow, joint lead managers sought indications of interest (IOI) in late November, with initial price thoughts in the range of the 3mBBSW+325-350 area.

Throughout the course of the day, several domestic real money and Asian accounts reverted with interest and Ampol formally launched the transaction at the same guidance of 3-month BBSW (Bank Bill Swap Rate) +325-350bps.

The book built steadily over the morning with more than A$600 million in orders by noon. Following this, the issuer revised price guidance in the +325-340bps area and gave a volume indication of A$300-500 million.

Following further update, a number of accounts that had been waiting on the sidelines placed orders, with the book peaking at around A$800 million, and many showing in price limit orders.

Oversubscription allowed Ampol to upsize to A$500 million at 3mBBSW+340bps, with the book dominated by high quality accounts, and over 45 final investors participating.

If anything showed that there’s still life in the Aussie hybrid yet, it was this transaction.

BEST INTERNATIONAL BOND DEAL AND BEST SECONDARY OFFERING

CSL Limited issuance to fund Vifor Pharma acquisition

MLAUB: BofA Securities, Citi, HSBC, JP Morgan

Advisors: Allens, BofA Securities, Credit Suisse, Gresham Advisory Partners, Goldman Sachs, Homburger, PJT Partners, Simpson Thacher & Bartlett    

Judges had only three words to say about this winning submission that took out both Best International Bond Deal and Best Secondary Offering: “size, tenor and oversubscription”.

By any standards, this jumbo US dollar offering from blood products giant, CSL, was an impressive piece of work.

With the aim of partially repaying a $6 billion bridging facility connected to CSL’s $11.7 acquisition of Vifor Pharma, CSL successfully priced its inaugural public bond offering via a $4 billion transaction with 5, 7, 10, 20, 30 and 40-year tranches. 

The merger was aimed at significantly boosting CSL’s therapies for iron deficiency conditions and kidney diseases, as well as its core plasma-based products for immunodeficiency diseases.

It was the largest ever single-currency DCM transaction from an ANZ corporate.  And at $23 billon peak book, it was the largest orderbook ever for an Aussie corporate transaction.

Given the bridge facility was US dollar-denominated, CSL did not swap the proceeds to Australian dollar, and so could utilise 20-year, 30-year and 40-year tenors without the added complication of long-end Australian dollar cross-currency basis illiquidity.

During the marketing exercise, CSL met with more than 110 investors across the US, Asia and Europe via a series of group calls. In addition, 182 investors engaged via a pre-recorded NetRoadshow presentation.

With investor feedback in hand, initial price thoughts were announced at the New York (NY) open and the orderbook peaked at $23 billion, which allowed CSL to tighten pricing an impressive -25bps to -35bps across the tranches.

Of the interested investors, 13 made combined orders for more than $300 million of bonds, and one sought to take out $1 billion of the $4 billion raise.

“The strong support shown by investors towards our inaugural US dollar bond issue reflects positively on our track record of disciplined financial management, as well as confidence in our strategy to invest in leading therapeutic capabilities and generate sustainable growth,” CSL chief financial officer (CFO), Joy Linton, said of the deal at the time.

In terms of lenders, heavyweights Bank of America (BofA) Securities, Citi, HSBC and JP Morgan gave the deal the direction and impact it needed to reach the next level.

The secondary offering – which provided the company with funding certainty in order to be compliant with Swiss takeover laws in its acquisition of Vifor Pharma – was the largest ever follow-on in Australia, and the largest ever APAC healthcare equity raising.

The placement structure optimised pricing with a variable-price bookbuild, ensuring pro-rata allocation to existing shareholders. Placement itself successfully completed during a period of traditionally muted ECM issuance and enjoyed a highly coordinated execution given that the international stakeholder involvement. 

Priced at a narrow 8.2% discount to last close, retail shareholder dilution was minimised through a comprehensive broker outreach process. 

The deal results in the expansion of CSL’s leadership across an attractive portfolio that covers renal disease and iron deficiency.

BEST IPO

APM Human Services IPO

MLAUB: BofA Securities, Credit Suisse, Goldman Sachs, UBS

Advisors: Undisclosed    

APM Human Services International – a leading provider of health and human services – might have slipped more than 6% on debut, but the lacklustre start did nothing to tarnish its reputation as one of western Australia’s (WA) most recent success stories.

Its A$982 million float was one of 2022’s biggest IPOs and showed every inch the Goldman touch. Judges were impressed by a successful cornerstone process which led to an accelerated institutional bookbuild following early demand. Total demand landed well in excess of deal size. 

The challenges and risks were manifold. There needed to be a comprehensive investor education process given that it involved a niche business of government contracting for human services.

However, with no direct ASX-listed equivalents, the transaction size represented the third largest ANZ IPO in 2021.

The financial participants established a high-quality share register dominated by long-only investors to provide aftermarket support. They also structured the transaction to facilitate its later S&P/ASX index inclusion.

The team de-risked the IPO through an early-look/cornerstone investor engagement process which drove deal momentum and provided APM with greater execution certainty.

More than 4000 of the company’s 7000 employees took up shares, either through an employee gift or purchase offer.

For earlier investors in the humans services group, the float was a windfall. Media reports said Madison Dearborn Partners – who bought into the group in March 2020 in a deal valuing APM at $1.5 billion – had a stake worth $919 million. 

Based on the prospectus documents, the PE firm is estimated to have pocketed more than $500 million, by cutting its stake from 52.1% to 29.7%.

BEST LOCAL BOND DEAL AND BEST SUSTAINABLE FINANCE DEAL – CORPORATE

NBN Co’s A$800 million green bond issuance

MLAUB: ANZ, CBA, NAB, Westpac (joint lead managers)

Advisors: ANZ, NAB (joint sustainability coordinators)

NBN’s inaugural green bond smashed records, proving that an original offering and a well-pitched marketing campaign can overcome broader market volatility.

This deal also earned Westpac Best Issuer of the Year – Sustainability in our ANZ House Awards, putting in an impressive performance alongside joint managers.

Seamlessly executed and perfectly timed, the submission impressed judges with the sheer number of firsts it managed to garner:

Ultimately, what attracted interest was the rarity of the offering. As NBN’s debut green bond, there was a very strong response from the A$MTN investor community which contributed to the overall success of the transaction.

The offering enabled the issuer to further expand its Australian dollar investor base, attracting several new high-quality investors who were integral to the transaction and helped to drive pricing.

Its green credentials also impressed the jury.

Proceeds from NBN’s inaugural green bonds will be allocated exclusively to finance or refinance new and existing eligible green projects aligned with the International Capital Markets Association (ICMA) Green Bond Principles, including energy efficiency and renewable energy. 

The transaction successfully built on NBN’s “Towards-Zero Carbon Ambition” and its three-year roadmap, which aims to reduce annual energy usage by 25GWh by December 2025; purchase 100% of renewable electricity from December 2025; and use electric or hybrid vehicles where available by 2030.

The deal also picked up the award for Best Sustainable Finance Deal – Corporate, where NBN’s adoption of a sustainable framework enhanced ESG investor appetite, enabling it to price competitively.

Against the backdrop of deteriorating market conditions due to the war in Ukraine and global monetary tightening, the deal was launched in a highly volatile markets.

However, NAB, ANZ and Westpac launched the deal with initial price guidance of +130bps for a five-year tenor, offering a 10-15bps concession against NBN’s secondary curve.

The orderbook, meanwhile, saw significant investor interest, peaking at around A$1 billion with more than 40 accounts taking part. The book even attracted several $100 million-plus cornerstone bids. 

The deal’s strength of demand ultimately permitted NBN to tighten the pricing by 7bps. 

“The green format attracted significant additional demand that would not have been available in a non-ESG labelled transaction, aiding the total book size and providing additional price tension,” one of the submissions detailed. 

BEST M&A DEAL

Sydney Aviation Alliance’s acquisition of Sydney Airport

MLAUB: Undisclosed

Advisors: Barrenjoey, Goldman Sachs, Macquarie, UBS

As one of the oldest continually operating airports globally and an essential part of Australia’s transport network, the Sydney Aviation Alliance (SAA) consortium’s 100% acquisition of Sydney Airport was the largest cash takeover in Australian history.

Valued at approximately A$32 billion, the deal was implemented by way of an inter-conditional arrangement and trust scheme.

The proposal involved a cash consideration of A$8.75 per stapled security, representing a 52% premium to Sydney Airport’s undisturbed closing price of A$5.751.

The transaction required UniSuper, holder of approximately 15% of Sydney Airport’s securities, to reinvest its equity interest in SAA’s holding vehicle. Subject to limited termination rights, UniSuper agreed to vote in favour of the transaction.

GS acted as joint financial advisor to SAA, reaffirming its leadership in public markets, as well as across infrastructure and financial sponsor M&A. Other advisors included Macquarie, UBS and Barrenjoey.

What appealed to judges was the highly strategic approach typical of those involved, which required broad stakeholder engagement of government, media, industry groups and customers.

The deal required advisory teams to put forward a credible and compelling price for the target, staying alive to shareholder feedback (both decision makers and portfolio managers if separate) and tracking how feedback evolved over its course.

This was a difficult ask considering how high quality strategic assets can often attract ‘forever’ investors reluctant to sell at a rational price - which can potentially create substantial market noise without materially impacting the outcome.

Add to this the challenge of translating the impact of Covid-19 into a quantifiable, value-driven discussion – and the participants had their work cut out for them.

The GS team in Australia sits atop M&A league tables, and for good reason. It has secured the best posting on both the Sydney Airport and Oil Search’s takeovers, helped IFM and friends into Sydney Airport, and has been on most of the big IPOs.

BEST NEW ZEALAND DEAL

Air New Zealand NZ$1.2 billion right offer

MLAUB:  Citi, Forsyth Barr, UBS

Legal advisors: Bell Gully, Herbert Smith Freehills

In April, Air New Zealand successfully executed a record breaking $1.2 billion rights offer as part its post-Covid-19 plan to recapitalise its balance sheet and recover from the impact of the pandemic.

The equity raise was part of a comprehensive recapitalisation package structured to position the airline for the resumption of international travel.

With 51% Crown ownership, it required close coordination with the New Zealand government. While government backing provided confidence for investors, the banking team also had to juggle uncertainty on the timing of earnings recovery.

This was also a high profile raise. As the national carrier and one of New Zealand’s best-known brands, Air New Zealand’s equity raise was arguably the most anticipated equity raise to come from the pandemic.

At stake was a $2.2 billion recapitalisation package, led by a $1.2 billion rights offer – the largest ever executed on the NZX. The equity raise resulted in the issuance of 200% of existing shares on issue.

A shortfall bookbuild of $144 million achieved a clearing price of $0.81 (equal to the theoretical ex-rights price [TERP]), giving existing shareholders who chose not to take up their rights a $0.28-per-share premium. This created a completely equitable and value neutral outcome for non-participating shareholders.

The rights offer was 88% subscribed, landing significantly above the average rights offer take-up in New Zealand. 

This was particularly strong given that Air New Zealand’s register is significantly weighted toward retail holders (around 65% of free float, excluding the Crown holding). Clear and effective communication of the structure and process was required to educate and inform investors. 

As a result of the extended offer period and traditional rights structure, retail investors were given the time to participate, which achieved an equitable outcome for both retail and institutional investors. It was the longest rights trading period in recent New Zealand history.

BEST PROJECT FINANCE DEAL AND MOST INNOVATIVE DEAL

North East Link PPP Project

MLAUB: Capella Capital, Westpac

Advisors: Allens, Capella Capital, Herbert Smith Freehills

As far as infrastructure is concerned, it doesn’t come more basic, more necessary, or more expensive than roads.

Judges liked this transaction which brought together financing across bank markets and government contributions to deliver A$15.8 billion in total funding to connect the existing M80 with an upgraded Eastern Freeway.

The project aimed to deliver a lot: 135,000 vehicles a day on upgraded facilities; a reduction in travel time for road users of up to 35 minutes; to deliver 15,000 fewer trucks on local roads; and create up to 10,000 jobs. It would also bring Melbourne its first dedicated busway and 34km of cycleways and walkways.

Westpac worked with the state to allocate risks effectively between the public and private sectors. At the same time, the bank had to adapt quickly to abnormal market conditions during the Covid-19 pandemic, which led to the associated dislocation of capital markets.

The sponsors’ bid was accepted by the state in a competitive process involving multiple bidders, with the final package representing the best value for tax payers – the culmination of two years’ work in bringing together the different strands of the deal from inception to financial close.

The delivery of Australia’s first public private partnership (PPP) contract procured through a collaborative model – with risks shared between the state and the private sector through an Incentivised Target Cost Regime – impressed the judging panel with its relative speed and seamless delivery.

In terms of innovation, Capella Capital’s strategy to raise the project’s $4.5 billion in private sector finance set new benchmarks for the global project finance market.

It tapped a vast range of sources to raise finance, managing more than 30 local and international lenders. These included those from the European long-term market, US private placement institutional investors, Korean and Japanese institutional investors, a Korean export credit agency, and members of the traditional Australian project finance bank market.

Bringing together six experienced PPP equity investors – with a mix of industrial and majority independent equity – Capella delivered a robust governance framework with substantial overcommitment.

Over $3.2 billion of the entire project was in 20 to 30-year debt commitments. No PPP has ever obtained this size and certainty for long-term debt. 

Nearly 70% of the project’s total debt has a maturity date of longer than 20 years, and the deal includes an offers margin, base rate and refinancing protection for the consortium and the state.

A mix of tenors across the transaction created a structure that achieves manageable refinancing at varying stages throughout the concession, with the amount of fixed-rate debt optimised to maintain project flexibility.

Ultimately, the deal deepened the pool of lenders financing Victorian PPPs, introducing new  entrants and debt markets to this burgeoning area within Australian finance.

BEST SUSTAINABLE FINANCE DEAL – FINANCIAL INSTITUTION

Charter Hall Office Trust A$500 million Sustainability-Linked Loan

MLAUB: ANZ, MUFG, NAB, SMBC, Westpac

Advisors: ANZ and NAB (joint sustainability coordinators), MUFG (sole ESG structuring coordinator)

As one of the largest managers of CBD office properties in Australia, Charter Hall Office Trust (CHOT) is naturally engaged with the kind of sustainability issues that are now a leading feature of the office property sector.

Its plan is to achieve net zero emissions in its operations (Scope 1 and 2) across its businesses by 2030.

To reach this goal, it funded a A$500 million sustainability-linked loan which now forms part of Charter Hall’s Green Financing Framework and brings the group’s sustainable finance deals to more than A$700 million in total, at the time of the announcement.

The seven-year facility embeds a sustainability linked structure across three key performance indicators (KPIs) that are directly linked to the fund’s performance.

With funds earmarked for general working capital, capex, refinancing and equity redemptions, second-party opinion from Sustainalytics boosted this submission. 

The Netherlands-based company – which rates the sustainability of listed companies based on their environmental, social and corporate governance performance – declared Charter Hall’s KPIs to be material and sufficiently in scope of the five core components of the Sustainability Linked Loan Principles (2021).

Charter Hall Office CEO, Carmel Hourigan, said: “This transaction further demonstrates our commitment to embedding ESG objectives into every aspect of our business.” 

“This is an outstanding outcome for CHOT and reflects investor demand for high quality assets that deliver environmental and social value, alongside financial outcomes to our funds and broader business.” 

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