New Issue Weekly Monitor
For the week beginning 1st Jul 2019
Asia ex-Japan G3
For the week beginning 1st Jul 2019, USD 2.77bn of bonds was issued from 8 deals.
Breakdown: USD 565mm of Investment Grade, USD 1.03bn of High Yield bonds, USD 1.17bn of Non-Rated bonds.
It was a quiet week for the Asia primary bond market with both Hong Kong and US bank holidays providing welcomed relief from a hectic month of issuance in June. High yield real estate issuers dominated the week while Korea Development Bank priced the only investment grade bond with a 5 year green bond in EUR.
FWD Group Limited priced USD 550m of 5 year subordinated bonds at 5.75% yield. The Hong Kong insurer last tapped the dollar bond market in January 2018 for Subordinated Perpetual bonds at 5.5%. The bonds came with Change of Control issuer redemption option or a 500 bps coupon step up in event the Change of Control redemption is not exercised. There was strong investor demand for the 5 year bonds, with the bonds eventually pricing 25 bps tighter from initial price guidance. The bonds continued to perform in the secondary market trading more than 2 points above reoffer.
Guangzhou R&F Properties priced USD 450m of 5 year non-call 3 year bonds at 8.125% yield. This is the 6th time the Chinese real estate company has tapped the dollar bond market this year. Investor demand was strong as books were over 8 times covered, allowing bonds to price 50bps tighter from initial price guidance. The strong momentum spilled over into the secondary market as bonds traded more than 1 point above reoffer. Bonds were mostly placed into Asian fund managers.
For the week, 23 banks have been involved as Bookrunners or Lead Managers. JP Morgan was the most active Bookrunner during the week, participating in 3 out of the 8 deals that were priced.
The new issue pipeline remains healthy with 6 new mandates announced in the week. There are 9 outstanding mandates announced over the last 2 weeks yet to price.