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- Herausgeber: John Wiley & Sons
- Kategorie: Fachliteratur
- Serie: Wiley Finance Editions
- Sprache: Englisch
An up-to-date, comprehensive analysis of the high-yield bond market in Asia Beginning with a general definition of high-yield bond products and where they reside within the corporate capital structure, this newly updated guide looks at the development of high-yield bonds in the United States and Europe before analysing this sector in Asia. It covers issuer countries and industries, ratings, and size distributions, and also covers the diversification of the high-yield issuer universe. It includes a thorough technical analysis of high-yield bond structures commonly employed in Asian transactions, including discussion of the respective covenants and security packages that vary widely across the region. Chapters and sections new to this edition cover such subjects as high-yield bond restructuring, the new high-yield "Dim Sum" market, and the high-yield placement market shutdown of 2008 - 2009. Finally, the book looks at the new characteristics of Asian economies for indicators on how the high-yield market will develop there are the near future. * Offers an extremely detailed analysis of Asia's high-yield bond market * Features new and updated material, including new coverage of the key differences between Asian structures and United States structures * Ideal for CFOs of companies contemplating high-yield issuance, as well as investment bankers, bank credit analysts, portfolio managers, and institutional investors
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Seitenzahl: 743
Veröffentlichungsjahr: 2013
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Contents
Preface
Acknowledgments
Chapter 1: Why High Yield’s Time Has Come in Asia
1.1 The Asia Pulp & Paper (APP) Legacy
1.2 Necessary Corporate Developments Benefiting Asian High Yield
1.3 Necessary Macro Developments Benefiting Asian High Yield
1.4 Asia’s Corporate Landscape of Family Enterprises
1.5 Traditional Generic Business Strategies for Family Enterprises
1.6 A Theoretical Approach to Debt versus Equity Funding
1.7 The Factor “Growth” Makes All the Difference
1.8 An Asian Growth Market: China’s Real Estate Sector
1.9 Suitability of High Yield Bonds for Family Enterprises
1.10 A Wall of Liquidity
Notes
Chapter 2: An Overview of the High Yield Bond Market
2.1 The Genesis
2.2 The World’s Largest High Yield Bond Market
2.3 Europe’s Growing High Yield Bond Market
2.4 “True” High Yield Arrives in Asia
2.5 The Asian High Yield Renaissance
2.6 Through and Beyond the Subprime Crisis
2.7 The Asian High Yield Market Comes of Age
2.8 More Tests of Resilience
2.9 Outlook—Disintermediation of Bank Lending
Notes
Chapter 3: Asian High Yield Issuers
3.1 What’s in a Name?
3.2 The Technology, Media, and Telecoms Sector
3.3 The PRC Real Estate Sector
3.4 The Metals and Mining Sector
3.5 Highly Concentrated New Issue Universe
3.6 Issuer Interviews
3.7 Australian Corporates Enter the High Yield Market
Notes
Chapter 4: The Buy-Side and Secondary Market for Asian High Yield
4.1 The Age of Liquidity
4.2 The New Fast Money Reality in Asia
4.3 “Real Money” Institutional Investors
4.4 The Regional Private Wealth Management Bid
4.5 Regulation S versus 144A
4.6 Why Going Down the Credit Curve?
4.7 Investors’ Approach toward High Yield
4.8 Limitations of Acceptance
4.9 Trading Asian High Yield
4.10 Investors in the Future, for the Future
Notes
Chapter 5: Structuring and Transacting High Yield Bonds
5.1 Changes in the Corporate Capital Structure
5.2 Structuring High Yield Bonds
5.3 Disclosure for High Yield Bonds
5.4 Marketing, Pricing, and Distributing High Yield Bonds
5.5 Credit Ratings and the Ratings Advisory Process
Notes
Chapter 6: Asian High Yield Bond Covenants Offer Superior Investor Protection
6.1 Key Concepts in Assessing Covenant Structures
6.2 Structural Protections against Key Risks Follow a Common Pattern Globally
6.3 The Standard Asian High Yield Structure
Note
Chapter 7: High Yield Bonds in Distress—Workout and Recovery
7.1 Corporate Governance Issues in China
7.2 The Asia Aluminum Case
7.3 Lessons from the Asia Aluminum Case
7.4 Capital Structure and the Lender—Noteholder Relationship
7.5 The Meaning of Structural Subordination
7.6 Distressed Exchange for Titan Petrochemicals
7.7 The Red Dragon/Central Proteinaprima Case
7.8 The Davomas Case
7.9 Default Rates in Asia’s High Yield Space Remain Low
7.10 Conclusion
Notes
Chapter 8: The Rise and Fall of the Asian High Yield Private Placement Market
8.1 Key Market Characteristics
8.2 Private Placement Structures
8.3 Supply Side Attractions
8.4 The Private Placement Issuance Process
8.5 Investors’ Motivations
8.6 The Collapse of Asia’s High Yield Private Placement Market
8.7 The Missing Piece in Asia’s Credit Culture?
Notes
Chapter 9: High Yield Funding in Renminbi
9.1 An Asian Currency Corporate Bond Market—At Last?
9.2 The Anatomy of the CNH Market
9.3 What Are the Benefits of Dim Sum Bonds?
9.4 Cumbersome Repatriation Process
9.5 Synthetic Renminbi Bonds
Notes
About the Author and Contributor
About the Website
Index
Additional Praise forA Guide to Asian High Yield Bonds
“Florian Schmidt’s topic is of increasing relevance to a region where a substantial proportion of even listed companies either are not rated or, when rated, are assigned sub-investment grade ratings. Asia needs a wider access to sources of financing such as high yield bonds. This book offers many real life examples and is pleasant to read in spite of its technical angles. It is a comprehensive, well researched tool for investors and issuers to understand those instruments in the specific context of Asia’s financial markets.”
—Philippe Delhaise, President, CTRisks Rating, Hong Kong
“A modern book for the modern era. The growth rate in Asia-Pac economies has been the development story of recent times and it is evident that the region will continue attracting ever-increasing capital inflows. As such this is a timely publication. Both domestic and international investors will find much of value in the text, which contains a wealth of genuine value-added data. The authors also cover the market’s diversity in useful fashion. Another sign of modern times: the “interactive” content that ranges from interviews and case studies to investor guidelines and key facts. A worthy addition to the finance literature.”
—Professor Moorad Choudhry, Department of Mathematical Sciences, Brunel University and author of The Principles of Banking
“The Asian high yield bond market is developing steadily. This exceptional book serves as an outstanding guide on the Asian high yield bond market. The content is well structured and presented. It not only acts as a good refresher for people who are experienced in the high yield bond process, it is also a high-quality reference for people contemplating for a high yield bond transaction. In line with the recent market trend, the book delegates an entire chapter on RMB high yield funding, effectively analyzing the benefit of “dim sum” bond and its less protective covenants.”
—Estella Ng, Chief Financial Officer, Country Garden Holdings Company Limited
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Copyright © 2014 by John Wiley & Sons Singapore Pte. Ltd.
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First edition published by John Wiley & Sons Singapore Pte. Ltd. in 2008.
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A ship is safe in harbor, but that’s not what ships are for.
—William G. T. Shedd
To my Wife, Montatip, and my Daughters, Chollada and Anchalee
Preface
This book makes no apology for being an apologia for the high yield bond and, in particular, its tremendous potential and range of applications in Asia. The product has had some notable advocates over the years. Without Michael Milken’s analysis, insight, and achievement, it probably would not exist. And in Glenn Yago—to whose scholarship this book is enormously indebted—high yield unquestionably found its most rigorous and articulate supporter. It is our hope that this work will add in a small way to the pioneering work of Yago and others by raising awareness of how the product has developed in and benefited Asia so far, why it should and indeed is becoming more popular with both issuers and investors, and of how it may develop, going forward.
However, as a debt capital markets professional, I want this book to have practical value for potential users of the market. I have tried to produce a work that will give readers as much historic, descriptive, and causal information as possible. But I have also tried to ensure that this book can be taken up by a would-be issuer of high yield bonds, or by a prospective investor, and used as a guide to the issuance process or the structural characteristics of high yield. It is for readers to judge whether this endeavor has been successful.
Since the first edition of this book was published in 2008, the world of finance has changed quite dramatically, and today’s debt markets bear limited resemblance to those pre-subprime. What started with a gradual erosion of investor confidence in late 2007 and culminated in the collapse of Lehman Brothers in 2008 led to an unprecedented loss of liquidity in most markets. Anything but the most liquid instruments was for sale, if necessary at any price, in a world where counterparty risk was unresolved as valuations of portfolios were seen to be an increasingly impossible task. Asia’s high yield market was hugely affected by these developments as investment banks scaled down their proprietary trading platforms, and leveraged hedge funds and private banking accounts became forced sellers, often on margin calls. Compared to the first generation of Asian high yield, lessons had undoubtedly been learned on the disciplines of corporate governance (not by everybody, though, as the events surrounding Sino-Forest and the Bakrie Group have shown), due diligence, and bond structuring. The excessive reliance on leveraged and fast-money investors when it came to the allocation of high yield bonds, however, proved unsustainable.
As much as the funding windows of central banks and government intervention prevented a complete collapse of the world’s financial system in late 2008 and early 2009, investors did soon realize that the de facto transfer of leverage from the banking system onto sovereign balance sheets had left some nations extremely vulnerable. The ensuing Eurozone crisis forced Greece, Portugal, Ireland, and Spain under ECB and IMF rescue programs, each with painful austerity packages attached. Whether these measures are enough to avoid the Eurozone debt crisis spreading into core Europe was not clear at the time this book was written. Neither was it clear how the United States would tackle long overdue structural reforms to reduce its increasingly unsustainable debt stock.
While the frequency and the severity of financial crises increased, the conditions attached to debt instruments and the capital required to support them have changed and will continue to do so, especially in Asia. Borrowers in the region have clearly been forced to be more flexible with regard to their financing plans, and consequently put their capital raising initiatives on a broader footing by seeking a much more diversified pool of investors. And this pool is growing with U.S. institutional accounts of the highest quality such as Claren Road, Loomis Sayles, T. Rowe Price, and Western Asset Management Company (Wamco) having recently set up shop in Asia, helping the region to attract capital from within. The fact that Fortress Asia, as the International Financing Review put it in its 2012 year-end issue, “held fast since the global financial crisis struck in 2008”1 provided the necessary macroeconomic backdrop to make Asia an attractive investment destination for global portfolio money looking for alternatives away from the turmoil of the developed world, for decent returns and growth stories. At the same time—and in total contrast to the United States and many European countries—Asia’s sovereign wealth continued to grow as did the regional private banking sector. With bank deposits close to zero and yields on safe haven investments below inflation rates, all these investors are once again prepared to embrace a greater variety and a greater degree of risk to meet return thresholds. All these developments, the build-up of liquidity within the region plus the allocation preferences of global portfolio money benefited Asia’s high yield bond market to not only once again reemerge from a crisis scenario, but do so once again stronger than ever before.
Being so strongly supported by what can be described as a wall of liquidity, 2012 was a record year for international bond issuance from Asia. The fact that more than US$130bn could be raised against the noisy backdrop from peripheral Europe, the United States, and slowdown speculations surrounding China, was nothing but remarkable. This trend continued into 2013, and January of that year was the busiest on record for Asian high yield with more than US$11bn worth of bonds sold.
We should remember, though, that economies move in cycles, as do credit markets. And while I hope to be too sensible to subscribe to any view suggesting that Asia can somehow “decouple” its economies from the United States if there is a recession there, I also believe that Asia has passed a tipping point in its importance to the global economy,2 and that it will take more than a cyclical recession in the United States or Europe to put an end to Asia’s rise in business, trade, and finance. If anything, ongoing changes in Asia’s demographic profile and continued urbanization will increase intra-Asian liquidity further as will the growth factor of China, the world’s second-largest economy and nowadays also a political superpower.
While the Asia of today and its capital markets are unrecognizable from the days of its own crisis in 1997–1998, there are various potential stress points waiting to be addressed: despite all political goodwill, most of Asia’s local debt markets have not been accommodating corporate funding requirements. Credit differentiation and credit culture remain alien to markets that, despite all the hype created by bankers, officials, and politicians alike, simply failed to develop meaningful investment appetite or secondary market liquidity for credits more than marginally below sovereign level. Even the newly emerged Dim Sum market, perhaps prematurely dubbed by many as the next big thing, given the state of China’s capital account and the lack of convertibility of the renminbi, experienced a temporary but sharp decline in 2012 as slowdown talks on China put serious doubts behind the one-way appreciation bet, which arguably has been the major drawing card to promote exposure in China’s currency. For the time being, Chinese, Indonesian, and growth companies from other parts of the region will continue to rely predominantly on dollar-based funding from the international high yield bond market, taking currency mismatches into account.
Credit differentiation is not only lacking in the domestic bond markets but also internationally when unrated issuers are allowed to access the market, usually tapping private banking money. Any prospective borrower not willing to go through a credit rating exercise, hiding behind the subjective assessment that “the rating agencies don’t understand our credit and therefore wouldn’t rate us fairly” deliberately foregoes an essential degree of transparency. The fact that such behavior triggers closer scrutiny into such a borrower’s corporate governance shouldn’t really come as a surprise to anyone, least of all the borrower’s sponsors and management. Given that the end-investors of private wealth management firms may not have the tools to conduct the appropriate analyses, which can be extremely demanding, especially for complex corporate structures, caution is strongly advised for any unrated bond propositions being offered to them.
Most high yield bonds and capital securities are also—often aggressively—offered to private banks, where end-investors are hardly enabled to analyze the issuers’ capital structures, the degree of subordination, and the implications attached to this, of the propositions offered. This, together with the concept of private banking rebates paid to private wealth managers as a buying incentive, and the reemergence of highly leveraged sales, makes observers wonder to what extent history is about to repeat itself and to what extent end-investors’ interests are taken care of.
Developments in the global economy, the macroeconomic background, Asia’s corporate—but most important, changes in Asia’s high yield issuer—universe and the investor base for Asian high yield instruments, all warranted a new edition of this Guide to Asian High Yield Bonds. Compared to the first edition, this work has been completely rewritten and complemented by entirely new chapters. As such it serves very much as a replacement of the volume published in 2008.
OVERVIEW OF THE CONTENTS
Chapter 1 of this new edition describes the changes Asia’s corporate culture has undergone since the Asian financial crisis and how it managed to go through the global financial crisis of 2008 relatively unscathed. Against this backdrop as well as an improving macroeconomic environment many growth avenues are available for Asia’s mostly family-owned high yield issuers, encompassing China’s booming real estate sector and natural resources of different types, to name but two. The core piece of the chapter focuses on the question how and why high yield bonds should be used to fund and facilitate such growth or in other words: why high yield’s time has come in Asia.
Chapter 2 analyzes the development, anatomy, and drivers of the high yield markets in the United States, Europe, and Asia.
Chapter 3 looks at Asian high yield issuers and issues against the backdrop of and analysis of their respective industries, focusing on the technology, media, and telecommunications (TMT) sector, the Chinese real estate industry, and the mining-to-steel value chain. This includes case studies describing some of Asia’s landmark high yield deals and interviews with senior management of the respective issuers.
Chapter 4 elaborates on buy-side developments, the build-up of both regional and global liquidity for Asian high yield, changes in the composition of investor brackets, the challenges in assessing high yield bonds, credit and covenant packages valuation, and trading approaches. Key investors in Asian high yield provide their views on the development of the market in general, risk and reward considerations, structuring issues, secondary market liquidity, and benchmarking and performance parameters, as well as distribution and allocation patterns.
Chapter 5 is a practitioner’s guide to transacting high yield bonds, encompassing the three key workstreams: documentation; marketing, distribution and pricing; as well as the credit ratings process. Starting with a primer on capital structure, the basic concept of corporate high yield bonds, including the different types of subordination observed in Asian high yield, this part of the book takes the reader through the structuring aspects of such debt instruments. Particular emphasis has been put on all key aspects of high yield covenants and their application.
Chapter 6, provided by Moody’s Investors Service, outlines the specific risks in Asian high yield bonds and to what extent covenant packagers can mitigate these. The rating agency has taken the lead in researching Asia high yield bonds, their structures and covenant packages, and has developed a system to assess the quality of individual covenant packages. This is done within a broad Asian context, allowing for a comparison among Asian bonds as well as with high yield covenant protection standards in the United States and Europe.
High yield bonds are, by nature, high risk instruments. Chapter 7 sheds light into some of Asia’s most spectacular default and restructuring stories, analyzing various aspects by assessing both the legal as well as the structural side of the respective cases, but also providing conclusive lessons for both investors and issuers.
Chapters 8 and 9 examine the niche markets for Asian high yield, the dynamics behind the rise and demise of the Asian high yield private placement market, the emergence of Dim Sum bonds, and the suitability of the offshore Renminbi (CNH) market for Asian and Chinese high yield issuers.
The online version of this book also provides for two appendixes, a sample offering summary as used in Asian disclosure documents, and a generic Description of Notes, providing readers with an idea as to how the key high yield concepts and covenants are drafted in an Offering Memorandum.
With all the positives and negatives mentioned in this book, which I hope will be viewed as a reference work on the subject, I am certain that the high yield market will take some more knocks along the way. But the core belief that motivates the second edition of this book is that it will, in future more so than today, provide a unique, increasingly vital, and ultimately enduring form of growth capital to Asia, Inc.
Florian Schmidt
Singapore, September 2013
NOTES FOR THE USE OF THIS BOOK
Many pie charts in this book exclude non-investment-grade corporate bonds from the Philippines. This is because these bonds are not considered “true” high yield.
Corporate ratings in this book refer to Moody’s/Standard & Poor’s within the respective historical context. Many of these ratings have changed several times and when and where this happened it is mentioned behind the respective issuer’s name.
NOTES
1. Nachum Kaplan, “Lessons Learnt,” IFR Asia 2012 Review of the Year (December 2012): 18.
2. China accounted for a greater share of global gross domestic product growth in 2007 than the United States. (See “The Outlook for Asian High Yield,” ING Research, November 2007.)
Acknowledgments
Books targeted at a professional audience require a considerable amount of intellectual debt that, in this particular case, is owed to the investment banking operations I have worked for during the last 20 plus years. As such, I am much obliged to numerous professionals, mostly bankers and lawyers, who shared their views on product, structuring, and market dynamics while working on or preparing for transactions, or during public events and seminars.
Within this context a huge amount of credit and gratitude goes to one current and one former colleague of mine: Sharon Tay of the ING debt capital markets team, being second to none in the production of high quality PowerPoint and Word documents, spent countless weekends and nightshifts to not only source valuable information and graphics relevant for this book, but also put them into readable and presentable formats. Adam Harper put years of experience as the region’s leading bond market journalist into the first edition of the book.
I would like to particularly thank Laura Acres, senior vice president of Moody’s Investors Service, and her team, Jeannie-Marie Noyce and Alexander Dill, for their contributions to this book, by not only allowing us to use and quote from various publications but by producing a dedicated chapter on Asian high yield bond covenants. Moody’s has clearly emerged as the opinion leader among the rating agencies when it comes to the analysis of Asian high yield bonds.
The same amount of gratitude goes to the EuroWeek and IFR Asia teams, especially EuroWeek’s Asia-Pacific editor Matthew Thomas, for allowing me to use the interviews of a special supplement on Asian High Yield, published in July 2011 and sponsored by ING, and IFR Asia’s editor-in-chief, Nachum Kaplan, for granting permission to use his insightful and high quality commentaries on recent developments in Asia’s high yield market.
Thanks are also due to the market participants whose contributions add a practical dimension to this book. On the issuers’ side, these are Sayaka Iida, senior vice president and former chief financial officer of eAccess; Yuka Inoue, senior manager of the finance division of eAccess; Sharon Tong, chief financial officer of SOHO China; Estella Ng, chief financial officer of Country Garden; Dr. Battsengel Gotov, chief executive officer of Mongolian Mining Corp.; Ulemj Bashkuu, chief financial officer of Mongolian Mining Corp.; Parry Tse, chief financial officer of Evergrande Real Estate Group; Thomas Husted, finance director of Delta Dunia, the listed holding company of Bukit Makmur Mandiri Utama (Buma); and Ian Wells, finance director at Fortescue Metals Group.
Some of the region’s most astute and important investors made valuable time available for in-depth discussions. My gratitude goes to David Lai, investment director at Eastspring Investments; Sabita Prakash, head of Asian fixed income at Fidelity Worldwide Investmentes; Raja Mukherji, executive vice president and head of credit research at PIMCO; Richard Brown, head of credit research, and Angus Hui, fund manager Asian fixed income at Schroders Investment Management.
Thanks are due to my publisher, Nick Wallwork at John Wiley & Sons, for agreeing to publish this book, and particularly my editors, Gemma Rosey and Chris Gage, for their quality work.
Maintaining the strength required for a demanding job, tight transaction timelines, and an unforgiving production schedule requires plenty of support and sometimes outright distraction. My gratitude therefore also goes to all my friends back in Germany as well as here in Singapore. These include Dr. Rolf Lange who accompanied me on my first trip to China, back in 1986, and without whom I would have never made it to Asia in the first place; Matthias Ahlke, an inspiration when it comes to the creative field of photography and a faithful companion in the chase of the world’s last remaining steam trains; Frank Schubert, godfather of my daughter Chollada and a regular and always welcomed visitor to Singapore; my teammates at the German All Stars Football Club, and many more.
My biggest source of strength, however, has always been my family, their love, support, and understanding. This book is therefore dedicated to my wife, Montatip, and my two daughters, Chollada and Anchalee.
Chapter 1
Why High Yield’s Time Has Come in Asia
1.1 THE ASIA PULP & PAPER (APP) LEGACY
If we look back to the Asian debt capital markets into the last years of the 1990s, some 15 years ago, we find much that is familiar:1 Asia was booming, just as it is today. Foreign investment, both portfolio and direct, was flowing into the region in prodigious quantities, as it does today. Then, as now, sovereign and quasi-sovereign issuers and financial institutions dominated the Asian G3 bond market in volume terms.2 Then, as now, Asian corporate high yield issuers were raising increasingly large amounts of capital in the bond markets to fund their expansion, attracting the world’s institutional investors to the high-growth Tiger economies of the region. Yet borrowing paradigms in the high yield market have become vastly different today. This book will explain why and to what extent.
In June 1997, Indonesian pulp and paper producer Indah Kiat was in the market once again, completing a US$600m 10 percent bond due in July 2007. Another issuer from the same country and sector, Pindo Deli, was in the market with a four-tranche bond in 1997, transacting a total of US$750m. Indah Kiat and Pindo Deli were, and still are, operating parts of the Asia Pulp & Paper (APP) group of companies, which collectively borrowed more than US$12bn during the 1990s, only to famously default on its obligations in 2001 in the long aftermath of the Asian Financial Crisis of 1997–1998.
Despite annual debt servicing costs that reached US$659m in 1999, when the group had fixed charge coverage of just 1.5 times, APP was still able to access the public debt capital markets as late as March 2000, when it raised a US$403m deal due in 2010 with a reoffer yield of 17 percent to finance its operations in China, and it somehow managed to issue a US$100m one-year private placement yielding 30 percent in July that year. The first missed interest payments came soon thereafter, in September.
APP is now synonymous with the aggressive borrowing of what might be described as the “first generation” of Asian high yield issuers—and their bonds’ catastrophic endings. The company, which remains operational and, indeed, is the largest pulp and paper producer in Asia outside Japan, was by no means alone in overstretching itself in the international debt capital markets during those heady days. Moody’s Investor Services (Moody’s) registered 95 defaults by issuers domiciled in Asia in 1997 and 1998. Some of the better known names include Thailand’s Bangkok Land, Finance One, Somprasong Land, TPI Polene and Thai Oil, Daya Guna Samudra and Polysindo from Indonesia, Philippine Airlines, and China’s Guangdong International Trade & Investment Corp. However, the reality is that essentially every Indonesian or Thai private sector corporate bond issuer either defaulted or entered restructuring negotiations after 1997–1998. Indonesian textiles group Polysindo arguably issued the last deal in the original Asian high yield bull market: the now defaulted US$250m 9.375 percent bonds due in 2007 were announced in June 1997.
The effect on the young Asian high yield market was toxic—many of the specialist U.S. investment managers that had driven demand for the first generation of transactions, especially the Yankee bond issues specifically targeted at the U.S. market, sustained serious losses. These were compounded in 1998 by the collapse of U.S. hedge fund Long-Term Capital Management, the Russian default, and, in 2001, by the bursting of the dot-com bubble and the revelations of fraud at Enron. Such buy-side accounts typically pulled out of Asia and did not return for more than five years.
“Fee-hungry Western investment banks, investors greedy for yield but blind to regional risk, lax regulators, a local company with global ambitions but little regard for corporate governance—they all contributed to the disaster,” was how BusinessWeek went on to describe the APP meltdown in 2001, running the headline: ASIA’S WORST DEAL.3
Fast forward 15 years into the first week of January 2013: Chinese property developers Country Garden (Ba3/BB–) and Kaisa Group (B1/B+) transacted US$750m ten-year and US$500m seven-year non-call four deals, respectively. The two issues would not have been particularly noteworthy had it not been for the former’s US$18bn and the latter’s US$9.9bn order books, allowing for pricing of 7½ percent and 10¼ percent, respectively. A week later the bid price of Country Garden’s issue had risen to 102¾ percent to yield 7.1 percent, allowing another developer, Shimao Property (B1/B+) to raise US$800m 65/8 percent notes. Despite leaving almost nothing on the table in comparison with secondary levels, the final overbook stood at a gargantuan US$17.5bn from over four hundred investors.
It was an unprecedented wall of liquidity, the same that had driven the Credit Default Swap (CDS) of the Philippines flat to that of France, implying that the former should be investment-grade . . . or the latter not, the same that had driven Korean investment-grade issuers’ yields well below 2 percent, that had made deeply subordinated non–investment-grade paper from China look irresistibly attractive at 7 percent.
Has Asia once again reached the stage where return is decoupled from risk but linked to relative value? Nachum Kaplan, IFR Asia-Pacific Bureau Chief wrote on January 9, 2013, referring to the large amounts of private banking money padding the order books for China high yield bonds: “Private banks used to pitch conservatism and wealth preservation to their high-net-worth clients and steer them away from exactly the sort of paper they are stuffing them with right now. The backdrop for this is the extraordinarily loose monetary policy that is keeping global interest rates low. The problem is that it is distorting the risk/reward equation into something worryingly unsustainable. . . . Desperation for yield means more and more players are booking these high-risk assets. And when the private bank bid alone can leave a new issue nine times oversubscribed, the inevitable consequence is that yields start dropping to levels that simply do not reflect the risks.”4
Quantifying such risks is an almost scientific discipline in Asia with its varying bankruptcy laws and their sketchy implementation against frequently changing regulatory backdrops. Chinese high yield bonds, for example, are so deeply subordinated to the point of being equity-like. Their recovery values in a default scenario can therefore be minimal as the FerroChina and Asia Aluminum cases have shown. However, it doesn’t even require a worst-case scenario to get a feeling for the risks involved. In early October 2011, only 15 months before Shimao transacted their US$800m 65/8 percent notes, the due 2018s of the very same issuer traded as low as 68 cents on the dollar to yield no less than 20 percent. At the same time Country Garden due 2018s were bid at 74 percent to yield 18 percent, while Kaisa’s due 2015s were quoted at 67 cents to yield a staggering 29 percent. If the mood reverses once again from the current exuberance into despair, and this could—like 15 months ago—well be caused by external forces with no apparent link to China’s property market, such as the crisis in the peripheral Eurozone, capital losses in excess of 30 percent cannot be ruled out, a real threat for leveraged buy-side accounts.
With such warnings written on the wall, and the author of this book supporting the notion that the risk-reward profile of high yield bonds issued by Chinese property developers is technically and structurally distorted, a cynical observer may therefore ask how many of the causes for the APP disaster identified by BusinessWeek have changed since the Asian Financial Crisis and, perhaps even more so, the global leverage crises since 2007. Such a question would indeed deserve serious consideration. While it is beyond this book’s remit to assess the rigor of Asian regulators’ scrutiny, it could not be denied that the profit motive remains as strong as ever in investment banks, that investors are still hungry for returns, that specific risks remain in many Asian countries, or that Asian companies’ ambitions are once again sky-high, which is amply demonstrated by a combined transaction value for mergers and acquisitions in developing and newly industrialized Asia of some US$320bn in 2012.5
Khor Hoe Ee, former assistant managing director of economics at the Monetary Authority of Singapore therefore argues that “Asia needs to find the right balance between progress and prudence, innovation, and caution.”6 Balancing innovation with caution, Khor proposes three key principles to aid policymakers in the region:7
Past experiences and the undeniable risks involved in easy credit inevitably trigger the question, what is to prevent the new generation of current Asian high yield transactions from coming to the same sticky end as their predecessors? How can it be argued that high yield’s time has come in Asia?
1.2 NECESSARY CORPORATE DEVELOPMENTS BENEFITING ASIAN HIGH YIELD
It would be exceptionally naive of us to argue that a disaster like APP cannot happen again. Markets are inherently cyclical, driven up and down by imbalances between supply and demand. When liquidity is abundant, headline interest rates low, and credit spreads tight, investors have a tendency to ignore leverage and other questions of creditworthiness and concentrate instead on the return that higher yielding credits offer. We doubt that will ever change, and Khor refers to the classic principal-agent problem, elaborating that during the Asian Crisis shareholder’s interests were ignored by bank managers who lent indiscriminately to certain companies and projects, either at behest of governments or because these projects were related to influential shareholders.”8 During the subprime crisis, the blame had to go to the originate and distribute model, which gave lenders little incentive to worry about the credit standards for mortgages because they did not retain such loans. Paul Krugman in his work What Happened to Asia also highlighted the moral hazard problem caused by the perceived government bailout guarantees to banks, unregulated finance companies and megaprojects by their respective governments.9 The same type of problem reoccurred during the Subprime Crisis with the “too big to fail assumption” when banks used short-term funds to invest into complex long-duration products including mortgage-backed securities (MBSs) and collateralized debt obligations (CDOs).
While the paths into the Asian and Subprime Crises appear to share certain characteristics, such as capital inflows, abundant liquidity, and easy credit, we do argue that Asia’s high yield market has changed to the better since the Asian Crisis of 1997–1998, and improved further against the backdrop of the recent and ongoing global leverage crises (from household to subprime to sovereign). Credits and bond structures as a whole are assessed rather differently, due diligence standards follow the rigorous model known from the U.S. markets, risk is not concentrated in a handful of issuers, and the investor base is not only more sophisticated but also more diverse and stable. That enlarged pool of investors is also—for the most part—more discerning and more cautious, understanding better how to recognize the warning signs that should have alerted bondholders to APP’s imminent demise in 2001. For a start, since its renaissance began in 2003, the public Asian high yield market has shown admirable discipline in largely rejecting issuers whose principals were the same businessmen that presided over defaults or interminable restructuring negotiations in the wake of 1997–1998. They have also insisted on structures that offer maximum protection for bondholders, and on the highest degree of transparency with respect to the disclosure and the use of proceeds.
It is perhaps also fair to say that the traumas of the various crises changed issuers’ perception of the market at some level as well. At the risk of generalization and oversimplification, we believe that in general issuers and their sponsors are less reckless about leverage and more concerned about maintaining and improving credit ratings than they were in the first generation of Asian high yield. But it is also clear that high yield bond issuers in particular have changed over the last 15-plus years. The dominance of the family- or founder-controlled mid-cap company is under no real threat yet in Asia, but an increasing number of Asian high yield bond issuers now have links with international private equity.10 And, in a more globalized economy and financial marketplace than that of the 1990s, the management of companies with all kinds of ownership structures faced more pressure than ever to be an attractive destination of investment money and to maximize return on equity in order to maintain and grow equity valuations. The right amount of high yield debt on the balance sheet can help achieve this.
Issuers’ financials are indeed healthier nowadays. Leverage measured in debt to equity improved from 170 percent to 30 percent in Korea, from 160 percent to 50 percent in Indonesia, and from 130 percent to 45 percent in Thailand between 1997 and 2007. While default rates of high yield issuers during the peak of the subprime crisis in 2009 appear still higher in Asia than in the United States and Europe, this result was distorted by the influence of China, a country where corporate leverage had slowly but steadily increased. However, stable median debt/EBITDA ratios as shown in Figure 1.1,11 median interest coverage ratios, as shown in Figure 1.2, and median three-year funds from operation (FFO), as measured for Asia’s high yield issuers from 2007 to last 12 months as of September 2012, as shown in Figure 1.3, demonstrate a high degree of post-subprime financial prudence, even in times of recovery, increased liquidity, and easy credit.
FIGURE 1.1 Average and Median Total Debt to EBITDA for Asian High Yield Issuers
Source: Moody’s Investors Service.
FIGURE 1.2 Average and Median EBITDA Interest Coverage for Asian High Yield Issuers
Source: Moody’s Investors Service.
FIGURE 1.3 Median Three-Year Average FFO to Total Debt for Asian High Yield Issuers
Consequently, and as Figure 1.4 illustrates, Asian default rates have fallen from their peaks in late 2009 to close to zero, and remain inside or at least in line with other regions.12
FIGURE 1.4 Trailing 12-Month Default Rate across Regions, March 2008 to December 2013
Source: Moody’s Investors Service, as of February 28, 2013.
Note: APxJ refers to Asia Pacific ex-Japan, issuer-weighted, spec-grade default rate.
In short, corporate Asia’s cash flows have improved, its ability to service debt has become much stronger, and its creditworthiness—if seen as the inverse of its default rates—has reached an all-time high. These are essential conditions for the resurgence of high yield bonds in the region.
It is important to point out at this stage that, in one sense, high yield in the broadest sense never went away after 1998. There was no shortage of non–investment-grade “corporate” borrowers trying to access the market in the immediate aftermath of the Asian Crisis. These included the perennially cash-strapped National Power Corp (Napocor), the Philippines’ state-owned electricity generation and distribution entity. Napocor and other borrowers of its kind, such as its Indonesian equivalent Perusahaan Listrik Negara (PLN), however, were high yield only insofar as their debt had a non–investment-grade rating and therefore conformed to the term’s strictest definition: “A bond with a low rating. Bonds rated less than Baa3 by Moody’s or BBB by Standard & Poor’s or Fitch are considered high yield bonds. They have higher yields because they have a higher risk of default on the part of the issuer” (Farlex Financial Dictionary).
In reality, however, borrowers like these are more quasi-sovereign issuers from non–investment-grade emerging markets nations. Napocor even relies on an explicit sovereign guarantee by the Philippines’ Department of Finance. Regardless of their rating and the yield they may have offered, transactions for borrowers like these have never been high yield in the true sense of the word, and we prefer to characterize them as “emerging markets transactions.” Their credit story rests on their sovereign guarantee or the expected support they would receive from the government in the event of a default. A “true” high yield borrower’s credit story rests on its standalone credit fundamentals and the structure of the transaction.
True corporate high yield issues are non–investment-grade corporate bond transactions that are structured with a comprehensive set of financial and other covenants and, in some cases, a security package. These features are intended to ensure that, to the greatest extent possible, the funds provided by bond investors are deployed in, and do not leave, enterprises that generate earnings that will be used to service and repay the bonds those investors have bought. The covenant and security packages, which do vary across different Asian jurisdictions, are intended to give investors the greatest possible access to the assets of the issuer’s key operating subsidiaries in the event of a default. While they share these trademark features, each high yield transaction is unique, with the covenants and security packages tailored around an issuer’s specific corporate structure, cash flows, and the regulatory environment in the country of operations.
1.3 NECESSARY MACRO DEVELOPMENTS BENEFITING ASIAN HIGH YIELD
While we consider the corporate developments that made Asian high yield an investible proposition again, we should not forget the macroeconomic situation of the region today. As the global economy struggles to emerge from events generally viewed as the deepest financial crisis since the Great Depression, centered around sovereign debt concerns in the Eurozone, with knock-on effects even on China, credit markets are once again exposed, at least temporarily, to high volatility, accompanied by a partial shut-down. Asia had experienced its very own financial shock in 1997–1998, after which the region was on its knees, crippled by external debt, inadequate foreign currency reserves, and collapsed currencies and asset prices. Surely, Asia is not immune to crises as the volatility in the equity and credit markets testified, but the region’s healthier macroeconomic fundamentals have helped Asia to perform substantially better compared to other regions: more prudent treasury management at sovereign level, with less domestic spending and reduced fiscal deficits, an advanced financial architecture with well capitalized balance sheets and little exposure to subprime and CDO assets can be seen as key reasons behind this outperformance. Indeed, Asia appears to have established increasingly independent cycles with its fundamentals driving its recovery from ongoing financial crises. In many ways, the Asian financial crisis of the late 1990s saw Asia suffer acutely and in isolation, while the current crisis saw Asia last in and first out.
Recent developments testify to Asia’s ability to continue to develop as a somewhat more independent economic zone, depending on the global financial system but not entirely beholden to it. Asia has clearly passed a tipping point in its importance of the global economy. China overtook the United States as the biggest contributor to global GDP growth in 2007, while economists have been trying to guess how soon the Chinese economy will unseat Japan and the United States to become the world’s biggest. In December 2007, China had dislodged Germany as the world’s third-largest economy and according to investment bank Goldman Sachs, China’s GDP will overtake that of the world’s second-largest economy, Japan, by 2015 and that of the world’s largest economy, the United States, by 2040. PetroChina and China Mobile already rank amongst the world’s 10 largest companies by market capitalization.13 And while India’s economy started from a smaller base, Goldman’s economists also expect it to have passed Japan, Germany, France, and Italy in terms of real GDP size by the early 2030s.14Figure 1.5 shows the divide between China’s and Asia’s economic growth versus that of the United States.
FIGURE 1.5 China’s and Developing Asia’s GDP Growth Compared to That of the United States
Source: IMF World Economic Outlook Update on January 23, 2013.
Two of the principal causes of the Asian Crisis of 1997–1998 were inadequate foreign currency reserves to support exchange rates and an over-reliance on external debt. On both these fronts, Asia has made dramatic advances. Figure 1.6 illustrates the exponential increase in Asia ex-Japan’s international reserves. China’s foreign currency reserves are the by far biggest in the world, reaching US$3.31tr in the fourth quarter of 2012, up from US$220bn at the end of 2001.15 When China broke the US$1tr mark back in 2006 the Financial Times wrote: “China’s foreign currency reserves are likely to hit US$1,000bn this month: enough to buy Citigroup, Exxon, and Microsoft, with enough spare change for General Motors and Ford, as well.”16 One country with the worst hit currency of the Asian Crisis, Thailand, has recovered to the extent that its international reserve assets are now higher than those of the United States, at US$182bn versus US$150bn as of year-end 2012.
FIGURE 1.6 Asian International Reserve Assets, November 1997 to November 2012
Source: Bloomberg, as of January 31, 2013.
At the same time, as shown in Figure 1.7, the debt-to-GDP ratios in the core crisis economies of 1997–1998, Indonesia, Korea, and Thailand, has fallen to 25 percent, 34 percent, and 42 percent, respectively, according to IMF data of 2011.17 This compares favorably with the United States at 103 percent and the Eurozone where ratios of most member states are well beyond the 60 percent criteria required by the Maastricht Treaty.
FIGURE 1.7 Total Government Gross Debt as a Percentage of GDP for Selected Countries
Source: IMF World Economic Outlook Database, October 2012.
The concurrence of strong corporate balance sheets, low default rates, and a healthy macroeconomic backdrop explains how it was possible for the next generation of Asian high yield transactions to come into being. However, these circumstances do not explain why Asian high yield came back. They do not explain why Asian companies began to look at alternatives to their normal financing diet of retained earnings, bank loans, and equity. Yet Asian high yield issuance rose from US$1.7bn in 2000 to US$7.4bn in 2006, and again from US$2.1bn in 2009 to US$13.7bn in 2012, reflecting an overall compound annual growth rate (CAGR) of 18.2 percent.18 In practical terms, the regional high yield market has developed from a nonentity into a highly active sector of the broader Asian primary bond markets—it has come back from the dead, twice.
So why do Asian issuers choose high yield bonds after years of favoring other financing techniques, particularly retained earnings, bank loans, equity offerings, and convertible bonds? And why do many market participants and observers—including the authors of this book—strongly believe that the potential of high yield bonds is only beginning to be realized in Asia? To explain this, we need to look at a whole range of factors, some more generic but highly relevant for issuing family enterprises; others are more country- and industry-specific; and finally, of course, complementing supply-side considerations are significant demand-side developments in the global credit markets in general and Asia in particular.
1.4 ASIA’S CORPORATE LANDSCAPE OF FAMILY ENTERPRISES
Family enterprises, defined as entities where a person controls directly or indirectly a minimum of 20 percent of the voting rights and the highest percentage vis-à-vis other shareholders, play an important role in the world economy. Some of the world’s best-known brands such as Porsche or Benetton are produced and distributed by family enterprises. Rafael La Porta, in his work Corporate Ownership around the World, finds a significant concentration of ownership in the corporate sector of the richest economies, whereas widely held exchange-listed companies, perhaps surprisingly to some, represent a minority.19 Germany with its Mittelstand has become a prime example of family-owned businesses successfully running the bulk of an economy, occupying industrial niches and cementing leadership with high quality products and therefore competing formidably in an increasingly globalized business environment. But family ownership has also been and continues to be a very Asian theme. Hutchison Whampoa and Cheung Kong, controlled by Li Ka Shing, or the Samsung Group are some of the better known—investment-grade rated—examples. However, a look into the universe of Asia’s high yield bond issuers reveals that almost all of them, whether the private sector steel maker in China, the coal miner in Indonesia, or the property developer in the Philippines, are family enterprises. This is an important fact to understand not only the financing specifics of these enterprises but also why the high yield bond market in Asia has been so slow to take off, but ultimately will have to develop into a pivotal tool to fund the growth of Asia Inc.
The most striking and obvious characteristic of family versus public enterprises is the existence of family and corporate goals. The former exert a strong influence on the orientation of the company, and the interaction between the two necessitates often complex decision-making processes. Targets and value concepts in family-owned enterprises are globally similar and always reveal the emotional attachment of the family to the company. Attributes such as responsibility, risk aversion, independence but also secrecy are common. All these are connected and summarized in Table 1.1.
TABLE 1.1 Overview of Attributes of Family vs. Public
Source: Stiftung Familienunternehmen/PWC (“Die Kapitalmarktfähigkeit von Familienunternehmen,” Munich 2011).
Situation
Goals and Value
Characteristics
Development of the company
Emotional connect and identification of the family with the company
Responsibility
Company as a private matter
Secrecy
Overlap of personal wealth and company money
Preservation of the family enterprise for the next generation
Long-term view Risk aversion
Family plays a central role for the company
Retaining independence
1.5 TRADITIONAL GENERIC BUSINESS STRATEGIES FOR FAMILY ENTERPRISES
The emotional attachment of family owners to their companies leads to a heightened feeling of responsibility. While the overriding goal is to preserve the family enterprise to hand it over to the next generation, this, combined with an inevitable overlap of personal wealth and company money, leads to a long-term orientation of its business strategy. Risk aversion and the avoidance of dependencies (which in the worst case could lead to the loss of the company) are other key attributes that lead to the family retaining its central position within and control over the company.
Family owners strategically focus on market opportunities, product quality, and research and development. Their corporate leadership is thus characterized by a proximity to the products or services offered. This product-centric approach has an impact on the financing avenues, which can best be described as traditional and conservative: traditional by the choice of funding instruments, conservative by maintaining the existing ownership and decision-making structures. This, in turn, has led to a relatively low usage of share financing in family enterprises and as such is much different from the approach of non-family or listed enterprises. In such listed entities financing is pursued by managers with a core competence in financing who employ a whole range of capital-raising alternatives with the overriding goal of maximizing shareholder value.
While a connection between leadership structures and financing patterns can thus be easily established, it is of central importance to understand that the family enterprise itself often represents the single most important investment of the owner. Such low-diversified investment strategies do have an influence on the management of perceived risks, leading to specific assessments of the leverage-insolvency risk relationship. In other words: indebtedness is viewed differently in family enterprises from the way it is in non-family enterprises. Furthermore, the desire of family owners to remain in control of economic and noneconomic strategies as well as decision-making processes requires a robust majority in equity holdings, which leads to restrictions in equity financings.
Traditionally, most Asian family enterprises transacted their funding exercises outside of the capital markets, preferably using retained earnings or, with the above-mentioned caveats in mind, bank loans. Retaining earnings ties into the long-term characteristics discussed above by assuming that money made stays within the company. The family provides what can best be described as patient capital. The overriding goal to preserve the company typically entails a moderate dividend policy. Some families even do without any dividends, an approach that leads to a much strengthened equity base, thereby providing financial resources for new investments, independently of other funding pools. The basic principle of retained earnings leads to an overlap between private and company wealth which implies that the wealth of the family depends to a large extent on the well-being of the company, triggering careful decision-making processes and a fairly high degree of risk aversion.
A thorough and detailed analysis of strengths, weaknesses, opportunities, and threats of financing avenues other than retained earnings therefore did and does not always happen and, at first sight, may not appear necessary. Existing bank relationships usually provided credit limits on a when-and-if-needed basis. Such paradigms, however, are now changing rapidly, and any minimalist approach toward relationship-funding will be challenged against the backdrop of (a) an increased internationalization of the financial landscape; (b) the consolidation of the banking industry; and most importantly (c) regulatory measures such as Basel III with its severe impact on lender-borrower relationships. Financial crises and ensuing regulatory reforms have a strong impact on the lending behavior of banks, their willingness to fund growth enterprises, and the costs of borrowing. Indeed, capital markets globally are now benefiting from tighter credit and the convergence of loan and bond pricing, leading to the increased application of corporate bonds as a substitute to loan products.
Furthermore, the subprime and subsequent crises have amplified the competitive advantages of companies with access to domestic and international capital markets. In times of tight credit a highly diversified funding pool, including uninterrupted access to capital markets, has proven superior to the more traditional Asian funding approach comprising internal cash flow and loan financing.
Given that many family-owned enterprises are either rated non–investment-grade or have non–investment-grade credit metrics, high yield bonds should play a pivotal role within the context of corporate funding, and, indeed, they do so in the most mature and sophisticated capital market, the United States, where a substantial part of external corporate financing is done with high yield bonds, and to some extent in Europe. Asia, on the other hand, being without a comprehensive scientific discussion on high yield bonds to date, and therefore without a broad recognition of the suitability of high yield bonds as a viable funding alternative, has been a laggard, both in terms of timing and new issue volume. This, however, is bound to change, driven not only by the already mentioned regulatory changes, but even more so by challenging growth requirements in an increasingly globalized and competitive world.
1.6 A THEORETICAL APPROACH TO DEBT VERSUS EQUITY FUNDING
Classic capital structure theories such as the Modigliani-Miller Theorem stated that there are advantages for firms to be levered, since corporations can deduct interest payments from taxes. As the level of leverage increases by replacing equity with debt, the level of a company’s weighted average cost of capital drops and an optimal capital structure exists at a point where debt is 100 percent. The higher probability of bankruptcy costs associated with debt financing and the possibility of a transfer of ownership, as stipulated in the Trade-off Theory, would negatively affect the value of the firm and as such suggests not only a reduction of leverage but what is referred to as an “optimal” capital structure. Indeed the tax savings argument plays a minor role in the decision-making process of family enterprises when it comes to capital structure issues. Given that these approaches neither take internal and external environmental factors nor specific goals of family enterprises into account, the classic theories do not appear to be best suited to act as helpful parameters in assessing family enterprises’ financing options.
The Pecking Order Theory, on the other hand, tries to capture asymmetric information that affects the choice by which companies prioritize their sources of financing between internal and external as well as between debt and equity. Companies do have a strong preference for internal financing; that is, to retain earnings. Once this source is depleted or insufficient, external debt is raised. Asymmetric information favors the issuance of debt over equity as such issuance suggests that an investment is profitable and the current stock price is undervalued. Equity financing would signal a lack of confidence in the board and a feeling that the stock is overvalued. An equity issue would therefore have to be transacted at a discount and/or lead to a drop in the share price, apart from bringing external ownership into the company. While the Pecking Order Theory contributes to a broader explanation as to how family owned enterprises should conduct their financings, it does not apply to all industry sectors, and neither does it hold in cases where asymmetric information is a particularly important problem. One needs to consider that family enterprises are by nature heterogeneous. Certain means of funding may therefore be advantageous to one entity but not so to another.
The question of debt versus equity warrants a closer look at the capitalization of Asian high yield bond issuers. Table 1.2 provides a brief overview of the equity ratios of select Asia-Pacific high yield repeat issuers. An analysis of the most recent full year financials reveals that most of Asia-Pacific’s repeat issuers of high yield bonds feature adequate equity ratios, ranging from 25 percent to above 50 percent. Studies conducted in Europe arrive at similar results ranging from 30 percent to 50 percent.20 The prevalent textbook classification sees a company with an equity ratio below 20 percent as undercapitalized, and the commensurate debt level of debt of 80 percent being considered a potential threat to the company’s sustainability. An equity ratio of 70 percent and above suggests an overcapitalization. While this does not pose an immediate threat to the company, especially as the return on equity can be increased with additional leverage, a long-term view suggests threats if the avoidance of leverage prevents investments into significant and profitable growth areas.
TABLE 1.2 Equity Ratios of Select Asia-Pacific High Yield Repeat Issuers
Source: Bloomberg.
Issuer
Country
Equity Ratio
Fortescue Metals Group
Australia
33.3
Agile Property
China
29.1
China Oriental
China
41.5
Country Garden
China
28.1
Kaisa
China
28.7
KWG Property
China
30.7
Renhe
China
58.1
Road King
China
36.0
Shimao Property
China
29.9
Yanlord Land
China
46.3
Adaro Indonesia
Indonesia
43.2
Berau Coal Energy
Indonesia
25.4
Bumi Resources
Indonesia
16.0
Indika Energy
Indonesia
42.3
Lippo Karawaci
Indonesia
51.5
STATSChipPAC
Singapore
45.6
