Table of Conents

EXECUTIVE SUMMARY

  • The attraction of Asia
  • Economic and financial conditions
  • The report

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Chapter 01 - OPPORTUNITIES AND OBSTACLES

  • Liquidity - Asia is different
    • Differences in financing structures
  • Bank involvement and the credit squeeze
  • Viewpoint: Boey Yin Chong, Managing Director, Syndicated Finance, Corporate and Investment Banking, DBS Bank
  • The challenge of spreading the risk
  • Asian banks – a more nuanced picture
    • Losses from direct exposure to US sub-prime mortgage-related instruments
    • Impact from links between local and global markets
    • Impact from economic links
  • Beyond liquidity
    • Private equity
    • Institutional investors
    • Banks
  • Viewpoint: Alan Hirakawa, Head of Leveraged Finance, Asia, Barclays Capital Corporate Leverage Finance

  • Opportunities in Asia

    • Rapidly growing economies
    • Good quality companies
    • Underperforming companies
    • Conglomerates
    • Family-owned businesses
  • Obstacles in Asia
    • Regulatory hurdles
    • Accounting standard issues
    • Currency constraints
    • Political and cultural resistance
    • Regional differences
  • Viewpoint: Oliver Duff, Global Head of Leverage Finance, HSBC
  • Institutional investment
  • Private equity developments
  • Viewpoint: John Hourican, Head of Leveraged Finance and High-yield, Europe and Asia, Royal Bank of Scotland
  • Sovereign Wealth Funds – a new force Global equity market correction – the final rescue act
  • Big picture, small details

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Chapter 02 AUSTRALIA

  • The position of Australia in the Asian market
    • The effect of the credit crunch
    • Regional banking activity
  • Opportunities in Australia
  • Viewpoint: UK banker, focused on sponsor coverage
  • Viewpoint: Tim Whitehead, Executive Director, Co-head of Leveraged Finance, Australia and New Zealand, Goldman Sachs JB Were
  • A booming economy
  • Western (Anglo-Saxon) business culture
  • Good accounting standard
  • Favourable investment climate
  • Good legal recourse
  • Political stability
  • Ideal sector dynamics
  • Sophisticated capital markets
  • Viewpoint: Farhan Faruqui, Managing Director, Head of Loans and Leveraged Finance, Asia Pacific, Citigroup
  • Media ownership liberalisation
  • Funds market
  • Viewpoint: Oliver Duff, Global Head of Leverage Finance, HSBC
  • Obstacles in Australia
  • Local bank concerns
  • Currency limit issues
  • Foreign ownership issues
  • Shareholder and political resistance
  • CASE STUDY Qantas Initial challenges
  • Finance issues
    • Additional risk
  • Reasons for failure
  • Public to private transactions
  • Conclusion

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Chapter 03 JAPAN

  • The holy grail of the Asian LBO market
  • Viewpoint: UK banker, focused on sponsor coverage
  • Viewpoint: Farhan Faruqui, Managing Director, Head of Loans and Leveraged Finance, Asia Pacific, Citigroup
  • Viewpoint: John Hourican, Head of Leveraged Finance and High-yield, Europe and Asia, Royal Bank of Scotland

  • Viewpoint: Satoru Aoyama, Director, Fitch Ratings, Japan

  • Opportunities in JapanEconomic advantage

    • Banking sector
    • Conglomerates and family-owned businesses
    • Current price advantage
    • Underperforming companies
  • Obstacles in Japan
    • Conglomerate culture
    • Succession questions
    • Loan issues
    • Entry problems for foreign banks
  • Viewpoint: Alan Hirakawa, Head of Leveraged Finance, Asia, Barclays Capital
  • CASE STUDY Arysta LifeScience
    • Lessons from this success
    • Conservative business culture
    • Anti-foreign sentiment
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Chapter 04 CHINA

  • Viewpoint: John Hourican, Head of Leveraged Finance and High-yield, Europe and Asia, Royal Bank of Scotland
  • Opportunities in China
    • Huge state-owned sector
    • Underperforming companies
    • Appetite for risk
    • Weak equity markets
    • Obstacles in China
    • Legal framework
  • Viewpoint: UK banker, focused on sponsor coverage

  • Viewpoint: Charles Wang, Partner in the law firm, Zhong Lun

  • Poor accounting standards
  • Lack of management expertise
  • Financing limits
  • Low foreign bank penetration
  • Viewpoint: Anthony Wu, General Partner in Private Equity firm Hupomone Capital Partners

  • Viewpoint: Alan Hirakawa, Head of Leveraged Finance, Asia, Barclays Capital

  • Market prospects
    • State-owned enterprises
    • Private sector enterprises
  • CASE STUDY Harbin Pharmaceuticals
    • Reasons for failure
  • CASE STUDY GUM Holdings
    • Reasons for success
    • Further financings

Chapter 05 INDIA

  • Obstacles in India
    • Borrowing restrictions
    • Tax repatriation
    Successfully structuring financings
  • CASE STUDY Gecis International
    CASE STUDY Flextronics Software Systems
    • Deal structure
    • Future financing prospects
  • Opportunities in India
    • Economic growth
  • Viewpoint: Oliver Duff, Global Head of Leverage Finance, HSBC
  • Viewpoint: UK banker, focused on sponsor coverage M&A growth
  • Corporate leveraged deals
  • Other considerations
  • Viewpoint: Alan Hirakawa, Head of Leveraged Finance, Asia, Barclays Capital

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Chapter 06 OTHER NATIONAL MARKETS

  • Viewpoint: UK banker, focused on sponsor coverage
    • Taiwan Local private equity prospects
    • Market selectivity
    • Domestic banking issues
  • Viewpoint: UK banker, focused on sponsor coverage Singapore
  • Viewpoint: Boey Yin Chong, Managing Director, Syndicated Finance, Corporate and Investment Banking, DBS Bank
  • Market developments
  • UTAC
    • Express Offshore Transport and Miclyn Offshore Malaysia
  • Islamic financing structure South Korea

Tables and Figures

  • 0.1: US, European and Asia leveraged loans market size
  • 1.1: How US sub-prime affects leveraged finance
  • 1:2 Typical European LBO financing versus typical Asian LBO financing
  • 1:31 Investor bases in US LBOs
  • 1.32 Investor bases in European LBOs
  • 1.33 Investor bases in Asian LBOs
  • 1:4 Percentage of PE money earmarked for Asia versus current market size
  • 1:5 2007 GDP growth rates for Asian economies
  • 1:6 Sovereign ratings of leading Asian economies
  • 1:7 List of major Sovereign Wealth Funds and size of their holdings
  • 1:8 Falls in major Asian equity indices over past year
  • 2:1 Australian LBO market’s growth, 2005- 2007
  • 2:2 Australian LBOs as a percentage of Asian LBOs
  • 2:3 Success/failure rate of Australian P2P transactions
  • 3:1 The take-off of the German market
  • 3:2 The non-take-off of the Japanese market
  • 3:3 Japan loan league table showing Japanese banks’ dominance
  • 3:4 Japan loan league chart showing Japanese banks’ dominance
  • 3:5 Japanese M&A loan league table showing Japanese banks’ dominance
  • 3:6 Japanese M&A loan league chart showing Japanese banks’ dominance
  • 3:7 Japanese leveraged loan league table showing Japanese banks’ dominance
  • 3:8 Japanese leveraged loan league chart showing Japanese banks’ dominance
  • 4:1 Basic structure of Chinese LBO financings
  • 4:2 Detailed structure of LBO financings 4:3 Foreign bank penetration of Chinese market
  • 5:1 Gecis International financing structure
  • 5:2 Flextronics financing structure
  • 5:3 Sigma financing structure
  • 5:4 Indian M&A data
  • 5:5 Indian cross border M&A data

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Appendices

  • Global LBO financing volumes 2005-2007
  • Asian LBO financing volumes 2005-2007
  • Australian financing volumes 2005-2007
  • Japan financing volumes 2005-2007
  • India financing volumes 2005-2007
  • China financing volumes 2005-2007
  • Taiwan financing volumes 2005-2007
  • South Korea financing volumes 2005-2007
  • Singapore financing volumes 2005-2007
  • Malaysia financing volumes 2005-2007
  • Indonesia financing volumes 2005-2007
  • Top 10 Asian LBO financings
  • Top 5 Australian LBO financings
  • Top 5 Japan LBO financings
  • Top 5 China LBO financings
  • Top 5 India LBO financings

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