Although IG continued to dominate in size, high-yield/unrated issuers made their presence known in the Asian dollar markets with 8 new issues and 5 taps

New Issue Weekly Monitor

For the week beginning 23rd Sep 2019
Asia ex-Japan G3


Asia G3 Year-to-date issuance: USD 256.87bn

Key Market Data (as at 12pm, 27 Sept 2019)
CT10 @ 1.775% (-1.8bps Week-on-Week)
S&P 500 @ 3006.79 (-0.09% Week-on-Week)
HSI @ 25963.28 (-1.94% Week-on-Week)
JACI Index @ 240.59 (-0.17% Week-on-Week)

For the week beginning 23 Sep 2019, USD 10.575bn of bonds was issued from 26 deals.

Breakdown: USD 7.18bn of Investment Grade, USD 2.74bn of High Yield bonds, USD 655mm of Non Rated bonds.

** As of this Friday morning, Beijing Hongkun Weiye Real Estate Development is out with a new 3yr deal at IPG 14.75% and Zhongliang Holdings Group with a tap of its existing 11.5% 21s. **

This week the news headlines were overshadowed by politically-fuelled themes — sanctions against certain Chinese firms for dealing with Iran, a formal impeachment inquiry against President Trump, and his pronouncement that a trade deal with China may happen ‘sooner than you think’. Treasuries yields edged marginally lower across the board. 

BBB-rated Beijing Haiguo Xintai (HGXT) Investment Holding Centre, wholly owned by Haidian (a Beijing district) SASAC, issued a benchmark size debut 3yr dollar bond at 4.3%, a full 50bps below IPG but 35bps above fellow newcomer, BBB+ rated Zhengzhou Real Estate Group. The 100% Zhengzhou SASAC-owned latter entity printed a 550mn deal in the same tenor, pricing at par to 3.2x oversubscription.

Highlighting what a difference parental pedigree makes, B1-rated Zensun Group (property developer also based in Zhengzhou but privately owned) debuted with the distinction of paying the second highest yield this week, namely 13.5% for a 2yr, B2-rated senior unsecured issue sized at 220mn.

Although IG continued to dominate in size, high-yield/unrated issuers made their presence known in the Asian dollar markets with 8 new issues and 5 taps across a variety of yields. Ba2/BB-rated JSW Steel of India was the only non-Chinese name amongst new issues in this bracket, sporting one of the lowest yields within the range at 5.375% for a 5.5yr tenor and 400mn final issue size.

Coming in at 8%, unrated BVI-registered Green Fortune Capital Ltd issued 102mn worth of new 2yr bonds plus a 48mn tap the following day under the aegis of guarantor Ever Dragon Investment Group. The guarantor is a wholly-owned subsidiary of APP China, whose Indonesian parent Asia Pulp & Paper defaulted in 2001 in what was the largest default in Asia’s history. The new issue replaces Green Fortune’s first dollar issue, a 2yr 150mn deal, priced at 9% back in Sept 2017.

Thailand’s Kasikorn Bank followed compatriot Bangkok Bank’s lead from last week with a Tier 2 offering of its own sized at 800mn. The 12nc7 deal garnered orders of over 3.5bn from mostly Asian FMs, and settled at T+170bps for a 3.343% YTC.

Retailer Li & Fung came to market with a 5yr offering at IPG T+300bps, following 2 successive downgrades in two years to Baa3. The issue tightened a modest 10bps on completion for a 400mn issue size.  

For the week, 42 banks were involved either as Bookrunners or Lead Managers. With a hand in virtually all ex-China offerings, HSBC regained the lead in number of deals done (9), although Citibank surpassed HSBC in volume with 4.2bn worth of issuance.

Ten new mandates were announced during the last two weeks. 

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