Ten billion scale corporate bond underwriting bidding, there areBrokerOnly reported 0.0001% underwriting rate, investment bank price wars often jumped prices, supervision or intervention investigation
See also the investment bank price war!
Recently, a large central enterprise has underwritten and tendered for the upcoming 10 billion-scale corporate bonds, and some brokerage companies have reported an underwriting fee of 10,000 yuan, which is called “jumping price”. Although the tender for the project has been suspended, the industry discussion has not stopped.
Some investment bank analysts analyzed that brokers “receive costs” to contract, perhaps for the long-term maintenance of qualified issuer customers, perhaps for underwriting share rankings, perhaps to develop other services.
Some senior investors in large investment banks have analyzed the reporters. "Some projects are profitable, and some projects are earning names. For some big projects, we will not do anything to make money. Although supervision may include investment bank underwriting rates. Classification rating. However, if a good project has a reserve price, we will pay the reserve price."
Ten billion corporate debt, the underwriting fee is quoted at 10,000?
According to media reports, in the near future, a large central enterprise has underwritten bids for the upcoming 10 billion-scale corporate bonds, and brokers have reported an underwriting rate of 0.0001%, equivalent to RMB 10,000. Most of the bidders involved in the bidding were large brokerage firms, and some brokerage firms gave an offer price of 80,000 yuan. The investment bank price war once again refreshed the industry's cognitive bottom line.
“The billion-dollar corporate bonds only receive 10,000 underwriting fees, which is indeed relatively small.” Some brokers have told reporters that the average level of corporate bond underwriting market is between 1,000 and 1,000. "Considering the recent market bond issuance, the stock market is rising and the bond market is under pressure.interest rateThere is an upside. For brokers to contract bonds, because there is no way to promise a better distribution to the company.interest rateMay also affect the underwriting rate. ”
Some investment bankers said that the underwriting of corporate bonds, investment banks need to do the work including the completion of the transfer, reporting, issuance, and duration management. “Most of the cost is the cost of travel and personnel, as well as the cost of maintaining customer relationships. It’s really hard to maintain costs by only 10,000.”
However, the above-mentioned fixed-income people said that in the past, there were many bonds that only received tens of thousands of underwriting fees, and even the cost could not be covered. This is not unusual. "The brokerage is purposeful. For example, the company (issuer) has better qualifications for long-term maintenance of the customer; or to obtain the trust of these companies with a lower underwriting rate; or for the underwriting amount ranking."
In fact, one-million of the underwriting rate is not the lowest in history. Just in the middle of last year, a regulatory notice obtained by a brokerage Chinese reporter showed that there were 52 underwriting fees for uncollected corporate bonds between October 16, 2017 and March 31, 2018. However, this is mostly because the brokers themselves issue bonds, and they agree to not accept the underwriting fees, which is more reasonable.
Bond underwriting rate is affected by four factors
Investment bankers told reporters that in the bond underwriting market, the issuer's qualifications, the urgency of capital demand, and the recent market issuance costs will all affect the underwriting rate. How does this affect?
First look at the qualifications of the enterprise (issuer), the better the qualifications, the better the debt, the brokers are grabbing, the underwriting rate is generally lower.
Secondly, depending on the qualifications of brokers, some companies prefer big brokers. They feel that the big brokers have a large market impact. This is more favorable for large brokers. In the case of controllable capital costs, large brokers may be selected. The underwriting rate is not necessarily lower than that of small brokers; some companies may feel that the requirements for small brokers are low, the underwriting rate can be negotiated, and small brokers will be selected.
Third, look at the company's capital cost expectations, some companies have a capital cost ceiling, and consider the brokerage underwriting fees after removing the issue rate.
In addition, market conditions are also a reference factor for underwriting rates. For example, the recent stock market rally, the bond market is under pressure, and interest rates have risen. For brokers to contract bonds, there is a certain impact, but it will not be particularly serious.
Supervise or check the underwriting rate of each brokerage
According to reports, on the afternoon of the 11th, the central government suddenly announced the temporary cancellation of this tender. According to the news from the media “叩叩财讯”, the reason for the bidding was that the brokers involved in the bidding reported to the regulatory authorities that the counterparty was viciously competitive at a price that was significantly lower than the industry standard, suspected of disrupting the market order and temporarily being supervised by the regulatory authorities. Stop.
A large brokerage investment banker told reporters, "As far as I know, the CSRC has been concerned about this matter, and does not rule out the possibility that the underwriting agencies will investigate their own underwriting rates."
In fact, as early as September 18 last year, the China Securities Regulatory Commission (CSRC) stated in the "Certificate of Daily Corporate Governance of Corporate Bonds" that the supervision of the corporate bond projects whose underwriting fees are much lower than the normal rate and the quality of their practice will be transferred to the scene. Check the work to verify that the underwriting agency has performed adequate and appropriate due diligence procedures and whether the disclosure of the issuer's information is true, accurate and complete. If there are problems in the quality of the underwriting institution's practice, or other violations of laws and regulations, such as violations of regulations, it will be handled strictly in strict accordance with relevant regulations.
At the same time, the Securities Industry Association conducts self-discipline management of unfair competition behaviors in accordance with the law, and on the basis of the acceptance, summary and analysis of corporate bond underwriting business, through regular special reports, industry publicity, one-on-one notification, on-site interviews. , self-discipline inspection and other forms, warning the development of industry norms.
In addition, the supervision will study and optimize the evaluation indicators related to the corporate bond business in the classified evaluation of securities companies, and guide the securities industry associations to study and promote the implementation plan of the classified management of securities company corporate bond underwriting business, and guide the underwriting institutions to compete in an orderly manner through policy incentives.
Investment bank multi-field open price war
In fact, in addition to the bond underwriting field, since the end of last year, there have been many screaming low-cost projects in the field of IPOs and fixed-income.
Last October, the IPO bidding of Shanghai Rural Commercial BankannouncementLeading the whole industry hot discussion, Haitong Securities sponsorship fee as long as 50,000 yuan, underwriting rate as long as five ten thousandths. Together with Guotai Junan Securities and CITIC Securities, the sponsorship fees were 160,000 yuan and 300,000 yuan respectively, and the underwriting rates were as low as 0.45% and 0.28% respectively.
On January 10 this year, Hua Xia Bank completed a non-public offering of 29.232 billion yuan. In this huge fundraising, the sponsoring underwriting fees of the five sponsoring and underwriting agencies were only 418,900 yuan. If the underwriting sponsorship rate is to be calculated, the rate for this single business is as low as one in 100,000.
“Some projects are profitable, and some projects are earning names. For some big projects, we will fight for it if we don’t make money. Although the regulation may include the investment bank’s underwriting rate in the classification rating, good projects have guaranteed prices. We will guarantee the reserve price." Earlier, a large investment bank veteran told reporters.
(Article source: brokerage China)