The issuance momentum in Asia primary bond market rebounded as PT Pertamina priced its lowest coupon bond and Vietnamese issuers continue to tap the offshore bond market.

New Issue Weekly Monitor

For the week beginning 22nd Jul 2019
Asia ex-Japan G3

Summary

Asia G3 Year-to-date issuance: USD 210.7bn

Key Market Data
CT10 @ 2.072% (+1.5bps Week-on-Week)
S&P 500 @ 3025.86 (+1.65% Week-on-Week)
HSI @ 28,397.74 (-1.28% Week-on-Week)
JACI Index @ 236.98 (+0.16% Week-on-Week)

For the week beginning 22nd Jul 2019, USD 8.27bn of bonds was issued from 12 deals.

Breakdown: USD 5.84bn of Investment Grade and USD 2.43bn of High Yield bonds.

The issuance momentum in Asia primary bond market rebounded last week, up 43.3% week-on-week on volume printed. The averages of both book coverage ratio and price tightening(from IPT) also rose sharply across both IG and HY issues last week. 3 jumbo deals were priced in the week while Mong Duong Finance Holdings issued the 2nd Vietnamese dollar bond deal of the month(and year).

PT Pertamina (Persero) priced USD 1.5bn of 10 year and 30 year bonds at 3.65% and 4.7% yield. The new bonds from the state-owned oil and gas company drew strong investor demand, with the deal 7.3x and 6.5x covered for the 10 and 30 year tranches respectively.  The new 10 year bond was priced with a 3.65% coupon, the lowest coupon bond in the Pertamina curve and the only sub 4% coupon Pertamina bond. The issuer last tapped the offshore market in October 2018 for a similar USD 750m of 30 year bonds at 6.65% yield. Investor momentum carried over into the secondary market as the new bonds traded 0.75 points above reoffer. 

Mong Duong Finance Holdings priced USD 678.5mm of 9.8 years senior secured bond at 5.125% yield, which amortizes from the fourth year and has a weighted average life of 6.9 years. This is Vietnam’s first project bond and investor demand was strong as books were over 4 times covered, allowing bonds to be priced 50bps tighter from initial price guidance. Investor demand for diversification continues to provide support as Vietnamese issuers continue its streak in tapping the offshore bond market.

For the week, 36 banks have been involved as Bookrunners or Lead Managers. Standard Chartered Bank was the most active Bookrunner during the week, participating in 8 out of the 12 deals that were priced.

The new issue pipeline remains healthy with 6 new mandates announced in the week, yet to price. 

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