Best financial borrower - Asia
Taiwan's banking sector is undergoing something of an overhaul, with the government determined to reduce the number of banks through consolidation and to encourage at least one local champion to develop a regional franchise. As the leading private sector bank in Taiwan, Chinatrust Bank already holds an enviable domestic position and might be one of the more obvious candidates to lead a charge overseas.
It certainly has the firepower. With a hugely successful $500 million upper-tier perpetual bond, callable after 10 years, Chinatrust has strengthened its capital base further and, with a capital adequacy ratio improved to 12.3%, it is now one of Taiwan's best-capitalized banks.
The bond was launched in March 2005 by sole bookrunner JPMorgan Securities in very difficult markets. "We launched the deal into very rough conditions," says Archie Lin, vice-president of JPMorgan Securities in Taiwan. "There were rumours that GM [General Motors] bonds were going to junk status – that's since been confirmed."
In markets like that it helps when you offer some rarity value and the Chinatrust bond, the first non-asset-backed deal from Taiwan since 1998, clearly benefited from fund managers' desire to add a rare sovereign risk to their portfolios.