In a first for FIIG, one of our three new DirectBonds is a Chinese based food and vitamin group issuing a bond in USD, offering fantastic diversification to wholesale investors away from financials and resource companies
Biostime International Holdings Ltd USD 7.25% 6 June 2021 senior subordinated bond
Biostime is a leading domestic infant milk formula provider in China. The company acquired an 83% stake in the Australian vitamin, herbal and mineral supplements provider, Swisse Wellness Group Pty Ltd in September 2015. Established in 1999, Biostime is headquartered in Guangzhou and listed on Hong Kong’s stock exchange in December 2010. The company has a market capitalisation of AUD2.85bn equivalent as at 20 June 2016.
Biostime has a leading position among domestic infant milk formula (IMF) providers in China, and in Australia’s vitamin and supplement market (Swisse). According to Nielsen, Biostime was the second largest participant in the super premium tier, with a 16.0% market share by retail sales value and a 5.9% market share of the overall infant formula market in China.
While having relatively high leverage following the debt funded acquisition of Swisse, S&P expects Biostime will materially improve its EBITDA margin and debt leverage over the next 12 months, driven by the recovery of its IMF business and the expansion of Swisse in China.
This USD bond is fixed rate and is indicatively offered with a yield to maturity of 6.47%. It is available to wholesale clients only in minimum parcels of USD200,000 and USD1,000 denominations thereafter.
Please refer to the factsheet
for further details.
QBE Insurance Group Ltd USD 5.875% 17 June 2046 subordinated Tier 2 bond
QBE Group ranks among the top 25 global insurers and reinsurers worldwide as measured by net written premiums. It has operations based primarily in North America, Europe, Australia/New Zealand, Latin America and the Asia Pacific region. In Australia, QBE is one of the top five insurers, and a leader in commercial insurance for small and medium sized enterprises through its strong distribution channels with brokers and agents. QBE's mortgage insurance business is one of only two independent (non captive) insurers in the Australian market.
The group has a high quality investment portfolio, with little exposure to higher risk asset categories. Asset quality is good, as the company follows a prudent investment policy to avoid excessive risk exposure to volatile investments and to maximise liquidity. Equity exposures remain modest in general, and debt securities rated A or higher have generally accounted for 95% or more of the total.
QBE has adequate capitalisation, relative to required regulatory solvency margins: QBE's local solvency ratio target (the ratio of adjusted total group capital to minimum capital requirements as stipulated by the Australian Prudential Regulation Authority (APRA)) is 1.6 to 1.8x.
This USD bond is fixed rate and indicatively offered with a yield to maturity of 5.38%. It is available to wholesale clients only in minimum parcels of USD200,000 and USD1,000 denominations thereafter.
Please refer to the factsheet for further details.
Westpac Banking Corporation AUD 4.80% 14 June 2028 subordinated Tier 2 bond
Westpac is one of the four major banks in Australia and the second largest banking group in New Zealand. The company has roots dating back to 1817, and is one of the top five companies by market capitalisation on the Australian Stock Exchange (A$99bn as at 10 June 2016).
Westpac, together with the other major Australian banks, are supported by strong capital ratios and a highly regarded prudential regulator in APRA that requires more capital in the coming years.
This AUD bond is fixed rate and indicatively offered with a yield to maturity of 4.43%. It is available to wholesale clients only in minimum parcels of AUD200,000 and AUD1,000 denominations thereafter.
Please refer to the factsheet for further details.