Search results for

Credit risk is the potential mark-to-market loss, at a chosen probability level, caused by a change in the counterpartys' credit quality.

The flotation of Australian insurance giant AMP, which should value the company at around A$12bn, has passed another potentially tricky test ahead of its launch on May 7. The company and its adviser have come up with formula that will allow a reasonable level of institutional take-up of the offer and prevent a potential price explosion in the aftermarket. Lead managers Credit Suisse First Boston and Deutsche Morgan Grenfell were charged with finding a structure which would entice enough policyholders - who will receive shares automatically in the demutualisation - to sell into the pool for institutional investors, while ensuring that those retail investors do not miss out on any launch price bonanza.

The Inter American Development Bank (IADB) became the largest supranational issuer in the Taiwanese dollar market this Tuesday following the launch of a debut NT$7.6bn ($230m) transaction. Although the triple-A group did not quite fulfil initial ambitions to raise NT$10bn, bankers from joint leads Grand Cathay Securities and ABN Amro Bank expressed their satisfaction with the success of the five year split tranche offering.

Hopson Development is lining up a Hong Kong IPO which could begin roadshowing as early as the second week of May. The $120m deal will be the first from ICEA Finance Holdings, the old NatWest Markets equity capital markets team led by Meocre Li, which previously held the mandate. Bankers said the deal would test the international distribution strength of the new venture. But some questioned the decision to re-open a negative Hong Kong primary market with a property company sold by a newly established and untested lead manager.

JARDINE Fleming has successfully taken Citicorp's place to arrange a private placement convertible bond for between $80m and $90m for First Philippine Holdings Corp. (FPHC), the electricity generation and distribution holding company of the Benpres Group. Bankers expect the coupon will be over 1.5% and the conversion premium around 10%. The bonds are likely to have a tenor of five and a half years with a put at year three and will not be credit enhanced. Foreign ownership of utilities is restricted to 40% in the Philippines and currently stands at 27% for FPHC, said analysts.

Salomon Smith Barney is today (Friday) to price the keenly awaited Yankee from the National Power Corporation of the Philippines (Napacor). The deal is set to emerge as a split tranche transaction likely to comprise 10 and 30 year tenors. Having said that it was hoping to raise a minimum of $250m, bankers said that the issue size may now be increased to as much as $500m with indicative spread talk narrowed down to 335bp to 350bp over Treasuries for the 10 year and 360bp to 375bp for the 30 year.

INVESTORS gave a mixed response to the pipeline of deals from Taiwan this week. China Petrochemical Development was forced to alter the terms of its issue radically and delay pricing while Macronix finally secured a letter of credit for its credit enhanced convertible bond and completed the $150m deal. Sole bookrunner Merrill Lynch and joint lead manager Core Pacific Yamaichi had been expected to price a $175m convertible bond for China Petrochemical Development yesterday (Thursday), but a combination of factors forced them to keep the books open for an extra day and final terms are only expected today.

The $100m IPO of Indonesian frozen food and fishing company Bintuni Minaraya (BMR) could be back on track following a postponement last December when the rupiah reached then record lows. The new lead managers for the transaction are Credit Suisse First Boston and one other international house, most likely ING Barings, which had been sole lead manager for the failed deal.

The Industrial Bank of Japan launched its second collateralised loan obligation last Friday, in an innovative ¥92bn deal backed by Japanese corporate loans. Although the transfer of assets to special purpose vehicle Lily Funding will not be perfected unless IBJ's rating falls below triple-B, Sumitomo Marine and Fire Insurance Co guarantees one tranche of the deal against the risk of IBJ defaulting.

The Kingdom of Thailand has invited up to a dozen European, southeast Asian and Japanese banks to submit proposals for its forthcoming global bond offering, aiming to complete beauty parades by the middle of May. Officials from the Fiscal Policy office and Ministry of Finance are now believed to be hoping to launch the prospective $1bn to $1.5bn issue earlier than initially indicated, with roadshows looking likely to begin during the last week of May. Thai experts commented that despite protestations from the government that a mandate has not been awarded to Goldman Sachs, the US investment bank has already begun preparing due diligence for the issue, allowing a fast track launch straight after the selection of either one or two other bookrunners.

* Bangkok Bank (BBL), which completed a private placement raising over $1bn two weeks ago, could increase the size of the issue further, according to Morgan Stanley Dean Witter. Some 440m shares were initially sold - 40m more than planned - but bankers say there is sufficient demand to sell the 30m share greenshoe in the light of the stock's strong trading performance.

* Hong Kong's Airport Authority also announced plans this week for a debut HK$500m issue off its HKMA-established note issuance programme. With a five year maturity, the deal is expected to be launched on May 20, with spreads in line with comparable offerings by the Mass Transit Railway Corporation.