bank and capital markets new issue review - ey€¦ · bank and capital markets new issue review 30...

ContentsSection 1 Market backdrop 2

Section 2 Bank loan market 3

Section 3 USD public bond market 5

Section 4 GBP public bond market 7

Section 6 EUR public bond market 9

ContactsUnited KingdomLuke ReeveTel: +44 20 7951 6548Email: [email protected]

Chris LoweTel: +44 20 7951 0826Email: [email protected]

Gary DavisonTel: +44 161 333 2767Email: [email protected]

EuropeOlivier CatonnetTel: +33 1 5561 0535Email: [email protected]

Jonathan H.M. HarfieldTel: +420 731 627 155Email: [email protected]

Britta BeckerTel: +49 40 36132 20781Email: [email protected]

AsiaGaurav AhujaTel: +65 6309 8276Email: [email protected]

US & CanadaK.C. BrechnitzTel: +1 704 335 4211Email: [email protected]

Tony IanniTel: +1 416 943 3476Email: [email protected]

AustraliaSebastian PaphitisTel: +61 2 9248 4773Email: [email protected]

Jason LoweTel: +61 3 8650 7600Email: [email protected]

Section 7 Private Placement market 11

Section 8 Ratings Update 14

@EY_UKI

Section 9 Glossary 15

Section 5 ORB Retail Bond Market 8

EY Capital and Debt Advisory - New Issue Review 2

Market backdropMarkets return positively from the Easter break despite sluggish US jobsdata

► The FTSE Eurofirst 300, a measure of European equities, rose by 0.6% on Tuesday morning on the backof the news that FedEx is in the process of acquiring its Dutch rival TNT Express for €4.4 billion.

► US index futures suggested that the S&P 500 will also rise despite Friday’s release of soft employmentfigures. The US non-farm payroll data suggested that the US added only 126,000 new jobs in March,the lowest since January 2014. The data can be taken as a positive for stocks, as it likely delays theincrease of interest rates by the Federal Reserve.

► The policy sensitive US 2-year bond yield hit a two month intraday low on Monday on the back of thedata to 0.47%, as 10-year yields eased just 1bp to 1.90%.

► Equivalent maturity Bunds are currently at 0.18%, only a couple of basis points above record lows, astraders and investors await information on whether Greece will be able to secure financial aid fromcreditors.

► Monetary policy has also been a focus in Australia, where the central bank surprised many by leavingborrowing costs unchanged. This is despite strong speculation that the Reserve Bank would drop ratesfrom the existing level of 2.25%.

► The generally positive tone has been reflected by Chinese equities, which have reached a seven yearhigh. This has in turn pushed base metal prices, with copper increasing 0.7% to $6,028 a tonne.However, the volatility in the oil price continues, surging 5.8% on Monday with a 1.4% drop.

Section 1: Market backdrop

Tenor 3yr 5yr 7yr 10yr 30yr

UK swap rate 1.08 1.36 1.53 1.69 1.98

Gilt rate 0.80 1.20 1.43 1.59 2.32

Tenor 3yr 5yr 7yr 10yr 30yr

US swap rate 1.04 1.46 1.73 1.99 2.40

UST rate 0.83 1.34 1.67 1.92 2.56Source: Bloomberg

Source: Bloomberg Source: Bloomberg

Source: Bloomberg

0.0

0.5

1.0

1.5

2.0

2.5

3.0

Yie

ld(%

)

10-year Benchmark yields

10yr UST 10yr Gilt 10yr Bund

0.0

1.0

2.0

3.0

4.0

2015 2017 2019 2021 2023 2025

Rat

e(%

)

3 month UK LIBOR forward rates

Current forward 3m UK LIBOR (-1 wk) fwd 3m UK LIBOR

2yr

3yr 4yr

5yr 7yr

10yr

0

1

1

2

2

3

Rat

e(b

ps)

Weekly change in UK SWAP

Bank loan market


Section 2: EUR/GBP bank loan market

Source: Loan Connector Source: Loan Connector

EUR / GBP completed transactions greater than US$250m

Issuedate Issuer

Trancherating(M, S&P)

Form Ccy Amount Maturity Margin(+bps) Sector Ctry Leads

31-Mar Ineos Ba3, BB- TL EUR 850 2022 E+325 Chemicals US Various

► Activity in the bank loan market was reasonably subdued during the week, most notably in Europe, asthe Easter bank holiday on both sides of the Atlantic decreased momentum.

► The week saw the close of the first quarter of 2015, European leveraged loan volumes stood at €20.4billion for the period, up 39% from 2014 and the highest since 2007. Mid-market deals, those which aresub-€350 million, saw a stellar 46% rise year-on-year. Leverage on new deals has however increasedwith the average being 4.9x for the first quarter, up from 4.7x in the fourth quarter of 2014.

► Land Securities, the UK’s largest listed commercial property company, signed a five year deal for £1.3billion. The loan, which has an initial margin of L+75bps and a utilisation based margin ratchet isprovided by a syndicate of eight banks, with Sabadell Bank and Bank of China joining the syndicate in therefinancing. The deal refinances Land Securities’ £1.1 billion loan signed in 2011.

► Hudson Pacific (Nr, NR, NR) announced its US$1.3 billion term loan package to back its $1.75 billionacquisition of Equity Office Properties and Silicon Valley Portfolio from Blackstone. The deal comprises aUS$550 million 5-year amended and restated term loan, a US$350 million 7-year term loan, a US$550million 2-year term loan and a US$400 million revolver. The pricing on the amended term loan nowranges from L+130-225, compared to L+130-190 previously. The deal is tied to a leverage grid,however should the borrower become rated, the margin will be drive by ratings.

► Large ticket deals continue to come through, particularly from the large commodity traders withGlencore announcing that it is in talks to refinance US$15.3 billion of credit facilities and Trafiguraannouncing a US$5.3 billion loan this week – the first time it has borrowed over US$5 billion.

0

20

40

60

80

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120

Mar

gin

(bps

)

European pricing grid - multiyear drawn

AA A BBB

0

50

100

150

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250

0

50

100

150

200

250

300

350

1Q11

2Q11

3Q11

4Q11

1Q12

2Q12

3Q12

4Q12

1Q13

2Q13

3Q13

4Q13

1Q14

2Q14

3Q14

4Q14

Num

ber

ofde

als

Vol

ume

(US$

bn)

Western Europe Loan Volumes

Lev - Vol. ($Bils.) IG - Vol. ($Bils.)Lev - No. of Deals IG - No. of Deals

Bank loan market


Section 2: USD Bank loan market

USD completed transactions greater than US$250m

Issuedate Issuer

Trancherating (M,S&P)


3-Apr LightSquared NR, NR TL USD 1,515 2020 +1200 Telecommunications US Jeff

2-Apr Penn Product NR, NR TL USD 575 2022 L+450 Transport US MS

2-Apr Penn Product NR, NR RCF USD 125 2020 L+450 Transport US MS

1-Apr Alvogen Pharma NR, B TL USD 675 2022 L+500 Life Sciences US GS, Jeff, SunTrust

1-Apr Carroll County Energy NR, NR RCF USD 5 2023 L+325 Power & Utilities US Various

1-Apr Carroll County Energy NR, NR RCF USD 58 2023 L+325 Power & Utilities US Various

1-Apr Carroll County Energy NR, NR TL USD 425 2023 L+325 Power & Utilities US Various

1-Apr Charter Communications NR, NR RCF USD 500 - L+125 Media & Entertainment US Various

1-Apr Charter Communications NR, NR TL USD 700 - L+275 Media & Entertainment US Various

1-Apr Charter Communications NR, NR TL USD 1,000 - L+125 Media & Entertainment US Various

1-Apr Charter Communications NR, NR TL USD 3,200 - L+250 Media & Entertainment US Various

1-Apr Cheniere Energy NR, NR TL USD 3,100 2022 L+225 Oil & Gas US Various

1-Apr Cheniere Energy NR, NR TL USD 8,400 2022 L+225 Oil & Gas US Various

1-Apr Ford Motor NR, NR RCF USD 9,750 2020 L+150 Automotive US Various

1-Apr Ford Motor NR, NR RCF USD 3,250 2018 L+150 Automotive US Various

1-Apr Gasoducto Sur Peruano NR, NR OTH USD 4,100 - - Oil & Gas PR Various

1-Apr K-Mac NR, BB+ TL USD 300 - - Technology US BAML

1-Apr K-Mac NR, NR RCF USD 60 2019 L+250 Consumer Products JP BAML

1-Apr K-Mac NR, NR RCF USD 70 2019 L+250 Consumer Products JP BAML

1-Apr K-Mac NR, NR TL USD 204 2019 L+250 Consumer Products JP BAML

1-Apr RE Astoria NR, NR OTH USD 92 2023 - Power & Utilities US Various


1-Apr RE Astoria NR, NR RCF USD 12 2023 - Power & Utilities US Various

1-Apr RE Astoria NR, NR RCF USD 39 2023 - Power & Utilities US Various



Bank loan market




Issuedate Issuer



1-Apr Valeant Ba1, BB TL USD 1,800 2022 L+325 Life Sciences CA Various

1-Apr Valeant Ba1, BB TL USD 2,350 2022 L+325 Life Sciences CA Various

1-Apr Valeant Ba1, BB TL USD 1,000 2020 - Life Sciences CA Various

1-Apr Verisk Analytics NR, NR TL USD 2,900 2016 L+150 Business Servies US BAML, MS

31-Mar Boyd NR, NR TL USD 142 2023 - Chemicals US BOM, RBC, UBS

31-Mar Boyd NR, NR TL USD 365 2022 - Chemicals US BOM, RBC, UBS

31-Mar Boyd NR, NR RCF USD 50 2020 - Chemicals US BOM, RBC, UBS

31-Mar Cambria NR, NR RCF USD 75 2020 - Mining & Metals US BMO, JPM

31-Mar Cambria NR, NR TL USD 20 2020 - Mining & Metals US BMO, JPM



31-Mar DCT Industrial NR, NR TL USD 125 2020 L+110 Real Estate US BAML, PNC, Wells

31-Mar DCT Industrial NR, NR RCF USD 400 2019 L+100 Real Estate US BAML, PNC, Wells

31-Mar DCT Industrial NR, NR TL USD 100 2017 L+110 Real Estate US BAML, PNC, Wells

31-Mar Dean Foods Ba3, NR RCF USD 450 2020 L+250 Consumer Products US Various

31-Mar Diplomat Pharmacy NR, NR RCF USD 150 2020 L+300 Life Sciences US GE

31-Mar Diplomat Pharmacy NR, NR TL USD 120 2020 L+300 Life Sciences US GE

31-Mar Foresight Energy NR, BB RCF USD 125 - - Mining & Metals US DB, GS

31-Mar Foresight Energy Ba3, BB TL USD 650 2021 L+475 Mining & Metals US DB, GS

31-Mar Howard Midstream NR, NR TL USD 300 2020 - Oil & Gas US RBC, SunTrust

31-Mar Howard Midstream NR, NR RCF USD 550 2020 - Oil & Gas US RBC, SunTrust

31-Mar Hudson Pacific NR, NR RCF USD 400 2020 L+115 Real Estate US BA, Keybank, Wells

31-Mar Hudson Pacific NR, NR TL USD 550 2020 L+130 Real Estate US BA, Keybank, Wells

31-Mar Ineos Ba3, BB- TL USD 625 2022 L+325 Chemicals US Various

31-Mar Kay Wind NR, NR RCF USD 14 2015 - Power & Utilities US Various

31-Mar Kay Wind NR, NR TL USD 405 2015 - Power & Utilities US Various

31-Mar Los Ramones NR, NR OTH USD 530 2035 L+250 Oil & Gas MX SANT

Bank loan market




Issuedate Issuer



31-Mar Mountain ProvinceDiamonds NR, NR TL USD 370 2022 - Mining & Metals CA BNS

31-Mar Murray Energy Ba3, BB- TL USD 1,600 2021 L+575 Mining & Metals US DB, GS

31-Mar Pan American Silver NR, NR RCF USD 300 2019 - Mining & Metals CA BNS, Canadian ImperialBank

31-Mar PCM NR, NR RCF USD 250 2018 L+150 Consumer Products US BAML, Wells

31-Mar Post Holdings NR, NR TL USD 700 2021 L+300 Consumer Products US Various

31-Mar PT Royal Industries NR, NR RCF USD 230 2020 L+415 Consumer Products ID Various

31-Mar PT Royal Industries NR, NR TL USD 270 2018 L+440 Consumer Products ID Various

31-Mar Sojitz NR, NR RCF USD 300 2016 - Industrial JP BOTM, MIZ

31-Mar TTM Technologies Caa1, BB TL USD 1,115 2022 L+350 Technology US BAR, JPM

31-Mar TTM Technologies Caa1, BB RCF USD 150 2020 L+250 Technology US BAR, JPM

31-Mar Veresen NR, NR OTH USD 1,275 2020 - Oil & Gas CA Various

31-Mar Veresen NR, NR RCF USD 75 2020 - Oil & Gas CA Various

31-Mar Wheels NR, NR RCF USD 800 2020 - Automotive US Various

30-Mar China Resources Power NR, NR TL USD 220 2020 - Power & Utilities HK Various

30-Mar Marquett NR, NR RCF USD 400 2020 L+225 Transport US BAML, PNC, Wells

30-Mar New Prime NR, NR RCF USD 260 2018 L+55 Transport US BOA

30-Mar Southwest Gas NR, NR RCF USD 300 2020 L+100 Power & Utilities US BAML, BNY

30-Mar Townsquare Media Ba2, NR TL USD 275 2022 L+325 Media & Entertainment US Various

30-Mar Townsquare Media Ba2, NR RCF USD 50 2020 L+375 Media & Entertainment US Various

30-Mar ViaWest B2, NR TL USD 395 2022 L+350 Technology US Citi, RBC, TD Sec

30-Mar ViaWest B2, B+ RCF USD 85 2020 L+400 Technology US Citi, RBC, TD Sec

USD public bond market


► The run-in to Easter proved a quiet one, with a number of macro-economic factors adding to thetraditional pre-holiday lull in new issuance. As investors took stock of a busy March and continued tohunt for relative value, the market saw a small selection of investment grade and high-yield names, withstrong bid support seen across the board as a result. With the US market heading into an earningsblack-out period, many saw the looming Easter break as a chance to take stock and only selectivelyparticipate in the limited new offerings seen in the market.

► Telstra (A2, NR, NR) had the market to itself on Monday, with its first deal in some four years attractingsignificant cross-border investor interest. The single-tranche 10-year US$1.0 billion deal launched withinitial price thoughts in the 135-140bps area, with a strong order book allowing final pricing to bemarked at T+118bps – effectively with no new issue premium to existing secondary levels.

► Hikma Pharmaceuticals (Ba1, NR, NR), the FTSE-100 listed pharmaceuticals business based in Jordan,became the first Jordanian company to issue a corporate bond. With half of the company’s revenuescoming from the US, investors showed strong support for the debut high-yield issuer, allowing theUS$500 million print to price tight to comparable secondaries, with the 5-year note settling atT+288bps and a coupon of 4.25%.

.

Domestic

Section 3: USD public bond market

Source: Reuters Source: Reuters

Issuedate Issuer Tranche rating

(M,S&P,F) Form Amount(US$m) Coupon Maturity Spread

(T+bps) Sector Ctry Leads

1-Apr Molex Baa3, BBB, NR SN 500 2.878% 2020 +155 Technology US Various

1-Apr Molex NR, BBB, NR SN 500 3.900% 2025 +205 Technology US Various

1-Apr MHGE NR, NR, NR SN 100 8.500% 2019 +754 Consumer Products US Various

31-Mar Union Electric A2, A, NR SN 250 3.650% 2025 +113 Power & Utilities US Various

31-Mar AES Ba3, BB-, NR SN 575 5.500% 2025 +370 Power & Utilities US GS

0

50

100

150

200

Spre

ad(b

ps)

USD secondary public bond spread 10-year

Avg. AA USD 10yr spreads Avg. A USD 10yr spreads

Avg. BBB USD 10yr spreads

0

20

40

60

80

100

0

10

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30

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60

Num

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issu

ed

Vol

ume

(US$

bn)

Monthy US$ bond volumes

Domestic volume (US$) Cross-border volume (US$)Cross-border number issued Domestic number issued

USD public bond market


Section 3: USD public bond market


(M,S&P,F) Form Amount(US$m)

Coupon Maturity Spread(T+bps) Sector Ctry Leads

1-Apr Taylor MorrisonCommunities B2, BB-, NR SN 350 5.875% 2023 +422 Construction CA Various

1-Apr Hikma Pharmaceuticals Ba1, NR, NR SN 500 4.250% 2020 +288 Life Sciences UK Various

1-Apr Norbord Ba2, BB-, NR SN 315 6.250% 2023 +453 Consumer Products CA RBC, BAML, SCA

31-Mar UPCB NR, NR, NR SSN 800 5.375% 2025 +345 Media & Entertainment NL Various

30-Mar HKT Baa2, BBB, NR SSN 500 3.625% 2025 +178 Telecommunications HK Various

30-Mar Telstra A2, NR, NR SN 1,000 3.125% 2025 +118 Telecommunications AU BAR, JPM, Citi

Cross border

GBP public bond market


Section 4: GBP public bond market


Domestic

Cross-border

► A quiet week in the Sterling market saw Centrica (Baa1, A-, A-) bring its first hybrid deal to the market,with a £450 million 60-year non-call 10-year bond being paired with a similar long-dated Euro offering.The introduction of hybrid capital into the company’s capital structure follows many other names in theutilities sector, whereby such debt is seen as an effective tool to insulating an investment grade rating inadverse trading conditions. The subordinated notes were rated Baa3 by Moody’s, and launched withinitial price thoughts of 5.375%-5.5%. Strong interest from institutional investors allowed the finalcoupon to be tightened to 5.25%, with an effective credit spread of G+361bps.


(M,S&P,F) Form Amount(GBPm)

Coupon Maturity Spread(G+bps) Sector Ctry Leads

1-Apr Centrica Baa3, NR, NR SUB 450 5.250% 2075 +361 Power & Utilities UK Various

011

223

344

5

0

0

0

1

1

1

1

1

2N

umbe

ris

sued

Vol

ume

(GBP

m)

Monthy GBP bond volumes

Volume (GBP) Number issued

0

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Spre

ad(b

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GBP secondary public bond spread 10-year

Avg. AA GBP 10yr spreads Avg. A GBP 10yr spreads

Avg. BBB GBP 10yr spreads


(M,S&P,F) Form Amount(GBPm)

Coupon Maturity Spread(G+bps) Sector Ctry Leads

31-Mar Scentre Management A1, NR, NR SN 400 2.375% 2022 +110 Real Estate AU Various

ORB retail bond market


In the market

Recent Issues

Date Issuer Ratings (M,S&P,F) Form Amount(GBPm) Coupon Maturity Sector Country

Oct-14 Eros International NR, NR, NR SN 50 6.50% 2021 Media & Entertainment UK

Oct-14 A2D Funding NR, NR, NR SSN 150 4.50% 2026 Real Estate UK

Aug-14 Burford Capital NR, NR, NR SN 90 6.50% 2022 Finance UK

Jul-14 Golden Lane Charity NR, NR, NR SN 11 4.47% 2021 Real Estate UK

Jun-14 Ladbrokes NR, BB, BB SN 100 5.13% 2022 Leisure UK

Jan-14 Paragon NR, NR, NR SN 125 6.13% 2022 Finance UK

Dec-13 Premier Oil NR, NR, NR SN 150 5.00% 2020 Oil & Gas UK

Oct-13 A2Dominion NR, NR, AA- SN 150 4.75% 2022 Real Estate UK

Jul-13 Bruntwood NR, NR, NR SSN 50 6.00% 2020 Real Estate UK

Jun-13 Helical Bar NR, NR, NR SN 80 6.00% 2020 Real Estate UK

May-13 International PersonalFinance NR, NR, BB+ SN 70 6.13% 2020 Finance UK

Mar-13 Provident NR, NR, BBB SN 65 6.00% 2021 Finance UK

Mar-13 Paragon NR, NR, NR SN 60 6.00% 2020 Finance UK

Feb-13 EnQuest NR, NR, NR SN 145 5.50% 2022 Oil & Gas UK

Dec-12 Alpha Plus NR, NR, NR SSN 49 5.75% 2019 Education UK

Dec-12 UNITE NR, NR, NR SN 90 6.13% 2020 Real Estate UK

Section 5: ORB retail bond market

Date Issuer Ratings (M,S&P,F) Form Amount(GBPm) Coupon Maturity Sector Country

Oct-14 International PersonalFinance NR, NR, NR SN - 5.88% 2022 Finance UK

Mar-15 Intermediate CapitalGroup NR, BBB-, BBB- SN - 5.00% 2023 Finance UK

EUR public bond market


► Whilst the European market has seen a flurry of cross-border issuers in recent weeks (notably from theUS, where favourable cross-currency pricing has been attracting a number of new names into themarket), this was the week where supply slowed down and investors largely focused on domestic names.

► Centrica (Baa1, A-, A-) paired up its 60-year hybrid Sterling note with a 61-year non-call 6-year €750million Euro subordinated issue. Initial price thoughts were placed at 3.125% for the issue, with stronginvestor interest permitting modest price tightening to a final print at 3.0% - equivalent to issue spreadof MS+269bps.

► ArcelorMittal (Ba1, NR, BB+) saw strong support for a twin-tranche fixed & floating-rate issue, placingsome €900 million of notes with relative ease as part of a broader refinancing strategy including itsexisting €6.0 billion revolving credit facilities. The deal was split across €500 million of fixed-rate 6-yearnotes, launched with price guidance of MS+280bps and final landing spot at MS+275bps, with a straight3.0% coupon. This was paired with a well-received 3-year floating rate note, up-sized from €250 millionto print at €400 million and pricing of 3mL+203bps (tightened from guidance of +210bps).

Section 6: EUR public bond market


DomesticIssuedate Issuer Tranche rating

(M,S&P,F) Form Amount(EURm) Coupon Maturity Spread

(MS+bps) Sector Ctry Leads

31-Mar Koninklijke DSM A3, A, NR SN 500 1.000% 2025 MS+50 Materials NL Citi, RAB, HSBC

31-Mar Faurecia NR, NR, NR SN 200 3.125% 2022 +313 Automotive FR Various

31-Mar Veolia Environment Baa1, NR, NR SSN 500 1.590% 2028 MS+93 Power & Utilities FR Various

31-Mar STADA Arzneimittel NR, NR, NR SN 300 1.750% 2022 +186 Life Sciences DE Various

30-Mar ArcelorMittal Ba1, NR, BB+ SN 500 3.000% 2021 MS+275 Mining & Metals LU Various

30-Mar Prysmian NR, NR, NR SN 750 2.500% 2022 MS+225 Industrials IT Various

30-Mar Bayer Baa2, BBB, NR SUB 1,300 2.375% 2075 MS+200 Life Sciences DE DB, SG, RBS

30-Mar ArcelorMittal Ba1, NR, BB+ SN 400 Float 2018 - Mining & Metals LU Various

020406080

100120140160

Spre

ad(b

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EUR secondary public bond spread 10-year

Avg. AA EUR 10yr spreads Avg. A EUR 10yr spreads

Avg. BBB EUR 10yr spreads

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12141618

Num

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Rm

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Monthy EUR bond volumes

Volume (EUR) Number issued

EUR public bond market


Section 6: EUR public bond market

Cross-border


(M,S&P,F) Form Amount(EURm) Coupon Maturity Spread

(MS+bps) Sector Ctry Leads

1-Apr Centrica Baa3, NR, NR SUB 750 3.000% 2076 MS+269 Power & Utilities UK Various

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US Private Placement volumes

2011 2012 2013 2014 2015

Private Placement market


► Data released in the week by PPM Datafield outlining US Private Placement volume by credit qualityshows that the split in 2014 remained broadly in line with 2013. NAIC-2 rated issuers accounted for65% of new volumes, up slightly from 63%. The volume of non-USD deals has also continued to grow in2014 with 23.8% of the annual total coming from 68 issuers, up from the 17% seen in 2013.

► Mettler-Toledo International (NAIC-2), the global manufacturer of scales and analytical equipment hastapped the market for €125 million of senior unsecured notes. The notes, which are due 2030 pay acoupon of 1.47%, follow the issuers previous deal in July 2014 where the company raised €250 million.

► Drew Industries has raised US$50 million of senior notes due 2020 directly with Prudential. The noteshave a coupon of 3.35% and pay quarterly. The Elkhart, Indiana based company manufactures parts forrecreational vehicles and components for adjacent industries.

► Central Hudson O&G (NAIC-1A), the New York State electricity and natural gas provider, successfullytapped the market in the week for US$20 million of 10-year bullets paying a 2.98% coupon. The dealwas priced at T+95bps and shown to the issuers existing lenders only.

► Alpha Trains (NAIC-2) completed its multi-source cross-border deal during the week. Participantsindicated this was the first deal of its kind outside of regulated utility issuers. The deal was for €1.25billion of senior debt with €125 million of subordinated debt. The deal was comprised of €250 millionof amortising senior notes due 2030 and €125 million of 7-year junior holdco debt. The remainder ofthe deal was funded from the public bond and term loan markets.

Section 7: US Private Placement market

Source: Private Placement Monitor Source: Bloomberg

Source: Private Placement Monitor Source: Private Placement Monitor

050

100150200250300350400450500

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sury

/bps

NAIC-1 US Private Placement spreads (bps)

10yr High 10yr Low

050

100150200250300350400450500

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NAIC-2 US Private Placement spreads (bps)

10yr High 10yr Low

0.0

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Yie

ld(%

)

US Treasury benchmark yields

5yr UST 7yr UST 10yr UST 30yr UST

Date Issuer Ratings Form Amount(US$m) Coupon Maturity Spread

(T+bps) Sector Ctry

Apr-15 Mettler-ToledoInternational NAIC-2 SN 125 1.47% 15yr - Manufacturing US

Apr-15 Drew Industries - SN 50 3.35% 5yr - Manufacturing US

Apr-15 Central Hudson G&E NAIC-1 (A) -275300275

5.38%5.69%5.95%

7yr9yr

12yr- Power &

Utilities US

Mar-15 Empire State REIT NAIC-2 SSN100125125

3.93%4.09%4.18%

10yr12yr15yr

- Real Estate US

Mar-15 Jones Energy - SN 250 - 8yr - Power &Utilities US




Date Issuer Ratings Form Amount(US$m) Coupon Maturity Spread

(T+bps) Sector Ctry

Mar-15 RREEF America REIT II NAIC-1(A) SN 100 - 7yr, 10yr

and 12yr +140-150 Real Estate US

Mar-15 TETRA Technologies - SSN 50 - - - Technology US

Date Issuer Ratings Form Amount Coupon Maturity Spread(T+bps) Sector Ctry

Apr-15 Aquasure NAIC-2(A-/BBB+) SSN 200 - 12 +140-145 Power &

Utilities AU

Apr-15 Orora - - - - - - - -

Mar-15 SA Power NAIC-1 SSN 200 - 10yr, 12yr,15yr - Power &

Utilities AU

Mar-15 AMA SpA - - 30 - 5yr, 7yr - Agriculture IT

Mar-15 Electrocomponents NAIC-2(BBB) - 85 - 5-7yr +140 Technology UK

Mar-15 SA Power Networks NAIC-1 - 200 - 10yr, 12yr,15yr - Power &

Utilities AUS

Mar-15 CBH Group - - - - - - Logistics AUS

Domestic: In the market

Domestic: Issued

Cross Border: In the market




Cross Border: Issued

Date Issuer Ratings Form Amount Coupon Maturity Spread(T+bps) Sector Ctry

Mar-15 Aquasure NAIC-2 SSN 310 4.48% 10yr +170 Power &Utilities AU

Mar-15 SOL Group NAIC-2 SN EUR 40 1.96% - - Power &Utilities IT

Mar-15 NSW Ports NAIC-2 SSN 300 - 10yr, 12yr,15yr +100 Power &

Utilities AU

Mar-15 Hallett 2 Wind Farm NAIC-2 12y/10avg +100 Power &Utilities AU

Mar-15 Kingspan NAIC-2 - EUR 127.5 - 6yr, 8yr,10yr - Construction IE

Mar-15 Ymagis SA (*) - - EUR 17.5EUR 19

4%4.25%

4yr5yr - Media &

Entertainment FR

*Deal was issued in the European Private Placement Market

Ratings UpdateNew and Notable from Ratings Agencies


The above list highlights ratings developments that we believe are interesting or noteworthy. This list is not exhaustive.

Section 8: Ratings Update

► Penn Products Terminals Assigned BB- Corporate Credit Rating, Outlook Stable by S&P► Paprec Holding (France based water recycling company) gets S&P B+ ratings with Stable Outlook

► Geberit AG (Swiss Industrial company)upgraded to A+/stable because ofstronger business risk profile by S&P

► Travelport (UK based travel servicesprovider) upgraded to B/stable from B- onimproving financial performance by S&P

► Elisa (Finnish Telecom Operator)upgraded to BBB+/stable outlook fromBBB by S&P

► Royal Adhesives and Sealant (USbased consumer products) upgraded toB2 / Stable Outlook from B3 by Moody’s

► Masco Corp upgraded by Moody’s dueto better performance and high cashflows, to Ba2 from Ba3

► Volkswagen's ratings upgraded to A2from A3 by Moody’s based on goodoperational performance

► Germany's strong economy and fiscal record support credit profile (Moody’s)

► ECB's Quantitative Easing unable to stop decline in February's high yield issuance (Moody’s)

► European Mortgage Payment Rates Rising leading to borrower prepayments(Fitch)

► Oil Hit to Norway Growth Partly Offset by Krone, Wages (Fitch)

► Rocky Economics for US Homebuilders if Rates Spike (Fitch)

► Home Prices Slow Most in German Wealthy Mid-Sized Cities (Fitch)

Key

New ratings

Negative rating actions

► Transocean Inc (Swiss O&G company)downgraded to BB+/stable from BBB- byS&P

► Philips’ rating downgraded to Baa1 fromA3 by Moody’s due to detoriatingprofitability

► Centrica (British Utility company) ratingdowngraded to Baa1 from A3 by Moody’s

► Banca Mediocredito del Friuli VeneziaGiulia S.p.A. (Milan based bank) ratingdowngraded to B/ Stable from BBB+ byFitch

► Becton, Dickinson and Company (USLife Sciences company) ratingdowngraded to Baa2 / stable outlookfrom A3 by Moody’s

► Banca Privada d'Andorra's (SpanishBank) rating downgraded to B/ NegativeOutlook from B+ by Fitch

► Bulgarian Energy Holding (Bulgariansupplier of electricity) rating downgradedto BB/negative from BB+ by Fitch

16 March – 20 March 2015

Positive rating actions

Trends in financial markets and industry sectors

Asset-backed securitization ABS Not rated NR

Commercial mortgage-backed securitization CMBS Other loan OTH

Deep discount bond DDB Revolving credit facility RCF

Energy savings performance contract ESPC Senior note SN

First mortgage bonds FMB Senior secured note SSN

London interbank offered rate LIBOR Subordinated note SUB

Medium-term note MTN Term loan TL

ABN Amro ABN Jefferies & Co. JEF

Bank of America Merrill Lynch BAML JP Morgan JPM

BBVA Securities BBVA KBC Capital Markets KBC

Bank of Tokyo Mitsubishi UFJ BOTM Landesbank Baden-Wuerttemberg LBBW

Banco Santander SA SANT Lloyds Capital Services Ltd LCS

Bank of New York BNY Lloyds Banking Group LBG

Bank of Egypt BoE Banca March MAR

Bank of Nova Scotia BNS Mega International Commercial Bank Co Ltd MICBC

Bank of the West BoW Mitsubishi UFJ Financial MIS

Barclays Bank BAR Mizuho Financial Group Inc MIZ

BayernLB BLB Morgan Stanley MS

BMO Capital Markets BMO Natixis NAT

BNP Paribas Group BNP Norddeutsche Landesbank GZ NLB

Capital One Bank COB Nomura NOM

Calyon CAL PNC Capital Markets PNC

CIBC World Markets CIBC Rabobank RAB

Citi Citi RBC Capital Markets RBC

Commonwealth Bank of Australia CBA Raiffeisen Bank International RBI

Commerzbank AG CZB RBS RBS

Crédit Agricole CA Société Générale SG

Credit Suisse CS Scotia Capital Inc SCA

Deutsche Bank DB Standard Bank Plc SB

DnB NORD DnB Standard Chartered Bank STA

European Investment Group EIG National Bank of Egypt STET

Fortis Securities Inc FOR SRM Robinson Humphrey SRH

Goldman Sachs & Co GS Sumitomo SUM

HSBC HSBC UBS UBS

Itau BBA IBBA UniCredit Group UNI

ING Groep NV ING U.S. Bancorp USB

Intesa Sanpaolo SA ISP Wells Fargo Wells

Incapital LLC INC WestLB WLB

Banca IMI IMI WestPac WP

GlossaryTechnical abbreviations

Financial institution abbreviations


Section 9: Glossary

EY | Assurance | Tax | Transactions | Advisory

Ernst & Young LLP

© Ernst & Young LLP. Published in the UK.All Rights Reserved.

The UK firm Ernst & Young LLP is a limited liability partnership registered in England and Waleswith registered number OC300001 and is a member firm of Ernst & Young Global Limited.

Ernst & Young LLP, 1 More London Place, London, SE1 2AF.

Information in this publication is intended to provide only a general outline of the subjects covered. Itshould neither be regarded as comprehensive nor sufficient for making decisions, nor should it beused in place of professional advice. Ernst & Young LLP accepts no responsibility for any loss arisingfrom any action taken or not taken by anyone using this material.

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