China cements its strong economic recovery as Chinese issuers continue to drive primary debt markets in Asia

New Issue Weekly Monitor

For the week beginning 18th Jan 2021
Asia ex-Japan G3


Asia G3 Year-to-date issuance: USD 49.9bn
Key Market Data (as at 12pm, 22nd Jan 2021)
CT10 @ 1.109% (+0.5bps Week-on-Week)
S&P 500 @ 3853.07 (+1.52% Week-on-Week)
HSI @ 29480.11 (+3.45% Week-on-Week)
JACI Index @ 257.73 (+0.63% Week-on-Week)

For the week beginning 18th Jan 2021, USD 11.65bn of bonds was issued from 20 deals.

  • Investment Grade: USD 4.7bn
  • High Yield: USD 3.72bn
  • Non-Rated: USD 3.23bn

** As of this Friday morning, AVIC International Holdings announced a 5yr deal at IPG of T+295bps(Area).  While Guorui Properties 3NP1.25 announced on Thursday is yet to be priced**


China cements its strong economic recovery as it reported GDP grew 6.5% in the fourth quarter of 2020, resulting in a positive 2.3% GDP growth for the full year of 2020. With no surprise, Chinese issuers continue to drive primary debt markets in Asia. 59% of issuance volume in January came from Chinese issuers so far. January 2021 is on track to register the highest issuance month on record for Asia G3 bond markets. The current record was registered in September 2020, which saw USD 54bn printed that month. Despite the strong issuance momentum, investors continue to be selective in the frontier markets. Mongolian Mortgage Corporation postponed their USD 3 year senior unsecured bond issuance after announcing IPG at 9.125% on Thursday.  
It has been a busy week for ESG investors, with 6 out of 20 deals priced belonging to the ESG sector, totaling USD 5.45bn in volume printed. Investor demand continues to be strong, with demand metrics outperforming those of non-ESG new issues: 

  • Average Book Coverage: 7.4x (vs 6.0x for Asia G3 YTD)
  • Average Number of Accounts: 164 accounts (vs 126.3 accounts for Asia G3 YTD) 

South Korean issuers this year have shown a strong preference for ESG bond issuance, with ESG bonds accounting for 6 of the 13 bonds issued by Korean issuers so far this year. SK Battery rode on the strong market’s appetite with a dual-tranche dollar denominated green bond deal. The 3yr and 5yr bonds were priced at T+150bps and T+175bps respectively, after tightening 45bps from the IPG level. The strong momentum on the deal allowed SK Battery to price the deal inside its existing credit curve. Order books across both tranches were 10x oversubscribed on average and bonds continued to perform on the secondary market, trading around 15bps tighter on the break.

PT Indonesia Infrastructure Finance (IIF) issued a debut US dollar deal under its Sustainable Financing Framework with ratings on par to the Indonesian sovereign. The USD 150mm 5yr bonds were priced at 1.75%, well inside initial guidance of 2.125%. Orderbooks were 2.6x covered with Asian AM investors taking majority of allocation. IIF is a private non-bank financial institution established by Indonesia Ministry of Finance, focusing on infrastructure financing activities. 

Macau casino operator SJM Holdings launched its first dollar deal in the offshore market with a dual-tranche USD 1bn offering. The 5NC3 and 7NC4 bonds were priced in absolute yield of 4.5% and 4.85% respectively, after tightening 50bps and 52.5bps from the initial price guidance. Final orders across both tranches were over USD 10bn. Private Banks took 20% and 15% of allocation for the 5NC3 and 7NC4 bonds respectively. Both tranches traded more than 1.5 points higher on break.

For this week, 58 banks were involved either as Bookrunners or Lead Managers. HSBC led the deal boards with 8 deals this week totalling USD 6.685bn.

New issue pipeline remains heavy with 7 new mandate outstanding from the ones announced over the fortnight.  

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