Issuance in the Asia primary bond market slowed down last week with issuers sidelined by heightened market volatility.

New Issue Weekly Monitor

For the week beginning 29th Jul 2019
Asia ex-Japan G3

Summary

Asia G3 Year-to-date issuance: USD 215.8bn

Key Market Data
CT10 @ 1.849% (-22.3bps Week-on-Week)
S&P 500 @ 2932.05 (-3.1% Week-on-Week)
HSI @ 26,918.51 (-5.21% Week-on-Week)
JACI Index @ 238.09 (+0.47% Week-on-Week)

For the week beginning 22nd Jul 2019, USD 5.16bn of bonds was issued from 9 deals.

Breakdown: USD 4.25bn of Investment Grade, USD 750mm of High Yield bonds and USD 163mm of Non-Rated bonds.

Issuance in the Asia primary bond market slowed down last week with issuers sidelined by heightened market volatility.  Highlight of the week was Sinopec’s USD 2bn triple tranche jumbo deal while Lotte Property & Development became the first real estate issuer to price a FRN deal this year. Dexin China Holdings made its debut in the offshore bond market pricing 2 year bonds at 14.0% yield – highest yielding new issue for the month of July. 

Lotte Property & Development priced USD 300m of 3 year FRNs at a spread of 77.5bps. The South Korean property developer saw strong investor demand as order books were over 10x covered, allowing the deal to price 27.5bps tighter from Initial Price Guidance. The bonds were placed mostly into Asian fund managers. Lotte Property & Development last priced 3 year FRNs in July last year at 3mL+92.5bps. 

Sinopec priced a USD 2bn three-tranche 144A/REGS deal following the Federal Reserve’s rate cut announcement. The deal drew USD 4.3bn of orders across the three tranches. Demand for the long end came from US investors while the Asian banks took majority of allocation in the short end.

For the week, 30 banks have been involved as Bookrunners or Lead Managers. HSBC was the most active Bookrunner during the week, participating in 5 out of the 9 deals that were priced.

The new issue pipeline winds down with 3 new mandates announced in the week, yet to price. 

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