New Issue Weekly Monitor
For the week beginning 25th Nov 2019
Asia ex-Japan G3
Asia G3 Year-to-date issuance: USD 331.1bn
Key Market Data (as at 12pm, 29 Nov 2019)
CT10 @ 1.772% (-0.9bps Week-on-Week)
S&P 500 @ 3153.63 (+1.61% Week-on-Week)
HSI @ 26,363.78 (-0.65% Week-on-Week)
JACI Index @ 242.63 (+0.51% Week-on-Week)
For the week beginning 25th Nov 2019, USD 12.2875bn of bonds was issued from 18 deals.
Breakdown: USD 3.15bn of Investment Grade, USD 1.7375bn of High Yield bonds, USD 7.4bn of Non Rated.
** As of this Friday morning, Chinese LGFVs Weifang Binhai Investment Development is out with a 363 days offering at IPG 6% level. **
Jerome Powell’s optimism citing record low unemployment, coupled with creeping signs of progress in US/China trade negotiations, set the stage for a market rally this week. New issue market made a dash for the door, right before the Thanksgiving weekend, with a diverse pool of issuers tapping the bond markets. The People’s Republic of China priced a four tranche USD 6bn deal, after having priced EUR 4bn early this month.
Primary issue dealflow in Asia provided good diversification opportunities, as Thailand, Macau and Indian issuers were active. The People’s Republic of China returned to the USD market with a USD6bn four-tranche deal that eclipsed its USD 3bn deal last October. The Chinese sovereign swept the market with its single largest four-tranche offshore bond issue, pricing 3yr/5yr/10yr/20yr bonds at T+35bps, T+40bps, T+50bps and T+70bps respectively. The issue drew orders over USD16.5bn, with a stronger skew towards the front end, allowing the 3yr and 5yr tranche to price 25bps tighter from IPG.
PTT Exploration and Production priced the longest corporate bullet bond year-to-date in Asian offshore market – USD 650m of 40 year bonds at T+172.5bps. The Thai oil and gas producer found good investor demand for the long end bonds, with final order books crossing USD 1.5bn from 106 accounts, allowing the deal to tighten 22.5bps from IPG.
Melco Resorts Finance completed its third bond issuance this year, pricing USD 900mm of 10NC5 year bonds at 5.375% yield. The Macau gaming operator previously priced 7NC3 year and 8NC3 year bonds at 5.25% and 5.625% respectively this year. Investor demand spilled over into the secondary market as the new bonds traded more than 2 points up on the break.
For the week, 47 banks were involved either as Bookrunners or Lead Managers.Bank of China topped the dealboards this week with USD 8.1bn in deal volume.
7 new mandates were announced during the last two weeks.