With the rate cut priced in, the less-than-dovish tone emanating from updated forecasts as Greater China again dominated the dealboard this week with 11 out of 13 deals, or 76% share.

New Issue Weekly Monitor

For the week beginning 16th Sep 2019
Asia ex-Japan G3

Summary

Asia G3 Year-to-date issuance: USD 246.298bn

Key Market Data (as at 12pm, 20 Sept 2019)
CT10 @ 1.775% (-1.8bps Week-on-Week)
S&P 500 @ 3006.79 (-0.09% Week-on-Week)
HSI @ 26477.11 (-2.61% Week-on-Week)
JACI Index @ 240.59 (-0.17% Week-on-Week)

For the week beginning 16 Sep 2019, USD 6.465bn of bonds was issued from 13 deals.

Breakdown: USD 3.965bn of Investment Grade, USD 1.8bn of High Yield bonds, USD 700mm of Non Rated bonds.

** As of this Friday morning, there were no new deals in play. **

Commentary:
Over the weekend, drone strikes incapacitated two major oil processing facilities in Saudi Arabia, causing a disruption of ~5% of the world’s oil supply and bringing geopolitical risk back to the fore.  

The other key event was Wednesday’s FOMC which saw the Fed Funds rate reduced by 25bps and interest paid on excess reserves lowered. With the rate cut priced in, the less-than-dovish tone emanating from updated forecasts and official statements by the Fed elevated Treasury yields, but not enough to counter the substantial rally from risk aversion earlier.  

Greater China again dominated the dealboard this week with 11 out of 13 deals, or 76% share.

SOCAM Development, a member of the Shui On Group, kicked off the week with a 2.5 year benchmark 6.2% offering which was later pulled due to lack of demand. In contrast, the HK subsidiary of China Orient Asset Management Co. issued dual-tranche 5 and 10-year bonds to enthusiastic market demand. One of China’s “big-four” distressed asset management companies (AMCs) and ultimately owned by China’s Ministry of Finance, China Orient saw a whopping 25 banks participating in its BBB+ / A- (S&P / Fitch) rated deal, which was ~10x oversubscribed and priced at T+135bps and T+185bps respectively.

With the acquisition of the Radisson hotel chain, Chinese hotelier Jinjiang International tapped the international markets for the second time in two years with a benchmark EUR deal and BBB+ expected rating. The 5yr deal priced with a 1% coupon and 1.015% yield (at MS+140bps).  

Fresh from listing on the HKSE in July, Shanghai-based property developer Zhongliang Holdings moved to debut its first dollar bond with a 2yr, 300mn offering yielding 12%. Like most other recent double-digit yielding issues, the B2/B+ rated issue was unable to tighten against IPG.

Bangkok Bank’s 15nc10 Tier 2 offering, its first since the bullet 9.025% 29s issued 20 years ago, received strong support due to scarcity value and real money demand. Rated 1 and 2 notch(es) below the senior bonds by Fitch and Moodys respectively, books for the 1.2bn deal were >3x covered with interest from 190 accounts across various regions, pricing 30bps lower than IPG at T+190bps.

Aside from Bangkok Bank, Indian solar power developer Azure Power was the only other non-greater China issuer tapping the market this week with a senior secured green bond. The high-yield 350mn 5yr issue, which priced at 6.85%, was 4.7x oversubscribed and saw substantial international interest from fund managers.

For the week, 50 banks were involved either as Bookrunners or Lead Managers. Bank of China wrested pole position from HSBC with 7 deals valued at 3.95bn.

Ten new mandates were announced during the last two weeks. 

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