Senior Credit Analyst, Lucror Analytics

Trung Nguyen

Senior Credit Analyst

High Yield Experts

Lucror Analytics

Lucror Analytics is a leading credit and ESG research specialist and a provider of technology solutions for differentiated fixed income strategies. Our roots are in bottom-up fundamental credit analysis with a specialization in high yield corporate credits from Europe, Asia and Latin America. We are one of few research specialists integrating ESG considerations with fundamental credit research through a dedicated ESG platform. Our ESG assessment covers five key criteria: Disclosure, E,S, & G Pillars, Controversies, ESG Impact on Credit and ESG Momentum.

Recognizing the importance and value-add of Factor Investing in fixed income, Lucror developed the Smart Quant Navigator (SQN), an intuitive platform that helps clients devise and implement factor-based strategies ranging from pure quant to active fundamental, with integrated ESG.

Our company has been at the forefront of developments in the fixed income markets, identifying opportunities and consistently delivering new products and value-adding solutions to clients. Lucror has close relationships with the largest and most reputable asset managers, family offices, hedge funds, investment and wealth managers globally.

Credit

Rakuten Group has launched a USD 1.8 bn 144A/RegS three-year notes offering with a coupon of 11.25% at 97.83, yielding 12.125%. The deal was upsized from USD 1.0 bn. Proceeds from the transaction will be used to fund a concurrent tender offer for the company's two USD 2024 bonds. The tender offer is for the 10.25% 2024s (USD 950 mn outstanding) and 3.546% 2024s (USD 800 mn). The tender cap is set at the size of the notes offering, which would be enough to buy back all the outstanding 2024 bonds. The tender consideration is USD 1,006.76 per USD 1,000 principal for the 10.25% '24s, and USD 956.75 for the 3.546% '24s. The early tender consideration is USD 30 per USD 1,000 principal.

  Rakuten Group has launched a USD 1.8 bn 144A/RegS three-year notes offering with a coupon of 11.25% at 97.83, yielding 12.125%. The deal was upsized from USD 1.0 bn. Proceeds from the transaction will be used to fund a concurrent tender offer for the company's two USD 2024 bonds.   The tender offer is for the 10.25% 2024s (USD 950 mn outstanding) and 3.546% 2024s (USD 800 mn). The tender cap is set at the size of the notes offering, which would be enough to buy back all the outstanding 2024 bonds. The tender consideration is USD 1,006.76 per USD 1,000 principal for the 10.25% '24s, and USD 956.75 for the 3.546% '24s. The early tender consideration is USD 30 per USD 1,000 principal. 

Rakuten Group - Tear Sheet - Lucror Analytics

Pan-Asia Catalysts/Events, Quiddity Advisors

Travis Lundy

Pan-Asia Catalysts/Events

Quiddity Advisors

Event-Driven

<ul>
<li>Last Friday, the FFW changes for the TOPIX July Free Float Weight Review were announced. There have also been other recent announcements creating flows on 30 July.</li>
<li>Some of these other recent announcements represent a possible change in ad hoc methodology.</li>
<li>Total Flow for 30 July is ~$3.3bn a side driven by selling flows (3/4 of the buy flows are reverse funding). $2.1bn of selling is &gt; 3 days ADV.</li>
</ul>


Last Friday, the FFW changes for the TOPIX July Free Float Weight Review were announced. There have also been other recent announcements creating flows on 30 July.
Some of these other recent announcements represent a possible change in ad hoc methodology.
Total Flow for 30 July is ~$3.3bn a side driven by selling flows (3/4 of the buy flows are reverse funding). $2.1bn of selling is &gt; 3 days ADV.


July TOPIX FFW Rebal - Bigger Than Expected

Equity Analyst, LightStream Research

Oshadhi Kumarasiri

Equity Analyst

Long-Short Analysis on Japan, Asia and the World

LightStream Research

LightStream conducts quantitatively rigorous and data-driven analysis with a focus on Japan and Asia.

We consistently cover the Tech, Consumer and Industrial sectors, and provide ECM and Events coverage more broadly.

We supplement traditional qualitative insights from company relationships with a robust quantitative foundation that examines as much historical data as is available.
We further refine the accuracy of our insights and calls through the use of alternative data to flesh out current trends, and through a valuation framework that emphasises non-superficial peer group selection and a proper attempt to understand the metrics and changes that have driven security valuations in the past.

Equity Capital Markets

<ul>
<li>Yesterday, <a href="https://www.smartkarma.com/entities/rakuten-group-inc" target="_blank" data-smartkarma-citation="entities:31:1" rel="noopener">Rakuten Group (4755 JP)</a> announced that its consolidated subsidiary, Rakuten Securities, has applied for a listing on the Tokyo Stock Exchange.</li>
<li>Rakuten Securities has long-term growth potential through leveraging Rakuten's ecosystem for steady securities account growth and exploring cross-selling opportunities for related services.</li>
<li>While the business seems promising, there may be concerns regarding its valuation, given its previous high trailing PE of 43.0x.</li>
</ul>


Yesterday, Rakuten Group (4755 JP) announced that its consolidated subsidiary, Rakuten Securities, has applied for a listing on the Tokyo Stock Exchange.
Rakuten Securities has long-term growth potential through leveraging Rakuten's ecosystem for steady securities account growth and exploring cross-selling opportunities for related services.
While the business seems promising, there may be concerns regarding its valuation, given its previous high trailing PE of 43.0x.


Rakuten Securities IPO: Promising Business with Valuation Caveats

Head of Research, IPOs & Placements, Aequitas Research

Sumeet Singh

Head of Research, IPOs & Placements

IPOs and Placements coverage across Asia Pacific

Aequitas Research

We cover all listing across the Asia Pacific along with follow-up placements. As of Dec 2020, our team had covered 539 IPOs with a hit rate of 73.5% and 685 placements with a hit rate of 66.8%.

We combine fundamental bottom-up views with our proprietary quantitative framework to provide a holistic coverage across new listings and placements. Our coverage includes pre-IPO notes before the deal is launched, follow-up analysis once the deal is live and post-listing trading analysis as well.

<ul>
<li>Aequitas Research puts out a weekly update on the deals that were covered by the team recently along with updates for upcoming IPOs.</li>
<li>In the IPO space, <a href="https://www.smartkarma.com/entities/sino-synergy-hydrogen-energy-technology" target="_blank" data-smartkarma-citation="entities:40364:1" rel="noopener">Sino-Synergy Hydrogen Energy Technology (9663 HK)</a> and <a href="https://www.smartkarma.com/entities/dekon-food-and-agriculture-group" target="_blank" data-smartkarma-citation="entities:36756:1" rel="noopener">Dekon Food</a> didn't do much even as other are lining up to try their luck.</li>
<li>On the placements front, Japan and India flows continue like there is no tomorrow.</li>
</ul>


Aequitas Research puts out a weekly update on the deals that were covered by the team recently along with updates for upcoming IPOs.
In the IPO space, Sino-Synergy Hydrogen Energy Technology (9663 HK) and Dekon Food didn't do much even as other are lining up to try their luck.
On the placements front, Japan and India flows continue like there is no tomorrow.


ECM Weekly (10th Dec 2023) - Toyota, Denso, Rakuten, Evolution, IRCON, REPT, UBTech, Entero

Executive Director, Metrical Inc

Aki Matsumoto

Executive Director

Independent Leading Corporate Governance Research

Metrical Inc

METRICAL INC. is an independent leading Corporate Governance research firm in Japan where Corporate Governance is increasingly recognized as an important element on corporate management in these days. Thus, CG research and solutions would become an essential component of global capital markets and play important to contribute to transparency of the markets and maximize shareholders’ value in Japan. 

METRICAL INC. provides Corporate Governance research and analysis including rating services, and  also offers investment research and IR services with solutions and customized profound research on CG and IR issues.

<ul>
<li>By canceling the IPO of Rakuten Securities, it is assumed that Rakuten Group wanted to generate cash on schedule even if it was 10 billion yen less than originally planned.</li>
<li>Although Rakuten Group could generate cash in the predetermined time. it remains unclear whether the company has secured a path to improve cash flow in the pending cell phone business.</li>
<li>If Rakuten Securities went to public, another parent-subsidiary listing would have been created, so the cancellation of the IPO can be evaluated as positive for the quality of the market.</li>
</ul>


By canceling the IPO of Rakuten Securities, it is assumed that Rakuten Group wanted to generate cash on schedule even if it was 10 billion yen less than originally planned.
Although Rakuten Group could generate cash in the predetermined time. it remains unclear whether the company has secured a path to improve cash flow in the pending cell phone business.
If Rakuten Securities went to public, another parent-subsidiary listing would have been created, so the cancellation of the IPO can be evaluated as positive for the quality of the market.


Cash Generation from the Sale of Subsidiary Shares Is the Default, but the Issue Remains Postponed

Japan

Rakuten Group, Inc. provides Internet services. The Company offers Internet finance services which including "Rakuten Card" and "Rakuten Bank". Rakuten Group also provides digital content services including electronic book services.

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Rakuten (4755 JP)

Rakuten Group - Tear Sheet - Lucror Analytics

Rakuten Group has launched a USD 1.8 bn 144A/RegS three-year notes offering with a coupon of 11.25% at 97.83, yielding 12.125%. The deal was...

Lucror Analytics

July TOPIX FFW Rebal - Bigger Than Expected

The TOPIX July FFW Review is more interesting than it would appear at first glance. There are some trades to do too. Watch Rakuten, Nippon Paint,...

Travis Lundy

Rakuten Securities IPO: Promising Business with Valuation Caveats

Rakuten Securities has long-term growth potential through leveraging Rakuten's ecosystem for steady securities account growth and exploring cross...

Oshadhi Kumarasiri

ECM Weekly (10th Dec 2023) - Toyota, Denso, Rakuten, Evolution, IRCON, REPT, UBTech, Entero

Aequitas Research puts out a weekly update on the deals that were covered by the team recently along with updates for upcoming IPOs.

Sumeet Singh

Cash Generation from the Sale of Subsidiary Shares Is the Default, but the Issue Remains Postponed

I would like to discuss the issues on the November 9 Nikkei article, "Mizuho to Invest Additional 90 Billion Yen in Rakuten Securities Due to...

Metrical Inc

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