Login
Allen & Overy plays a strong role in ASX COVID-19 issuance for clients
Since the onset of COVID-19, Allen & Overy’s Australian and US securities law equity capital markets team has advised on raisings on the Australian Securities Exchange (ASX) totalling approximately $3.2 billion.
Tony Zhang
The capital markets team has been kept busy throughout the recent surge of COVID-19 equity capital raisings on the ASX, which has seen $19.5 billion raised in the period 1 March to 22 May 2020
To continue reading the rest of this article, please log in.
Create free account to get unlimited news articles and more!
The A&O equity capital markets team is led by partners Tony Sparks and Mark Leemen and also includes partner Meredith Campion, counsels Cécile Baume and James Nicholls.
According to Dealogic, Australia is leading the way in total proceeds raised in secondary issues during the pandemic.
The $19.5 billion raised on the ASX (equating to 1.1 per cent of total ASX market capitalisation) compares to $12.6 billion on the London Stock Exchange (0.4 per cent), $21.8 billion on the New York Stock Exchange (0.1 per cent), $23.1 billion on NASDAQ (0.1 per cent), and $5.1 billion on the Singapore Stock Exchange (0.1 per cent).
“Supported by a favourable Australian regulatory regime, the extraordinary amount of capital raised in recent weeks has been led by market participants who learnt how to execute quickly and effectively during the GFC,” Mr Sparks said.
“Australian regulations provide a supportive environment for [boards] that are focused on fairness for shareholders during COVID-19 but also need to raise capital quickly and with certainty.
“Our regulatory environment is world-class and highly regarded internationally for the flexibility it gives issuers to raise capital quickly in times of need.
"We believe [boards] remain best placed to allocate new capital and that any attempt to impose additional constraints would be a retrograde step.”
Significant raisings advised on by Allen & Overy throughout COVID-19 include being the Australian counsel to Macquarie on United Malt Group Ltd’s $165 million institutional placement and share purchase plan.
Furthermore, the team led Auckland International Airport Limited’s NZ$1.2 billion capital raising, which comprised a fully underwritten NZ$1 billion institutional placement and an NZ$200 million SPP along with Credit Corp Group Limited’s $150 million capital raising.
According to the firm, the remarkably high volume of proceeds raised in secondary issues on the ASX over the past eight weeks reflects the speed to market which various overseas capital markets sought to imitate during and after the GFC.
Mr Leemen added that he is not seeing obvious signs of investor fatigue yet.
“If anything, we see the possibility of a second wave of raisings later in the year, both from companies that have delayed raising until their needs are clearer and some companies seeing opportunities in the [post-COVID-19] landscape,” he said.
“The depth and relative concentration of the Australian funds management industry has helped as it did during the GFC. Our large fund managers know the structures and processes and are able to deploy funds quickly into new raisings. This removes some of the risk associated with capital raisings.”
