New Issue Weekly Monitor
For the week beginning 12th Aug 2019
Asia ex-Japan G3
Asia G3 Year-to-date issuance: USD 218.7bn
Key Market Data
CT10 @ 1.556% (-19bps Week-on-Week)
S&P 500 @ 2888.68 (-1.03% Week-on-Week)
HSI @ 25,734.2 (-0.79% Week-on-Week)
JACI Index @ 240.64 (+0.71% Week-on-Week)
For the week beginning 12 Aug 2019, USD 2.09bn of bonds was issued from 7 deals.
Breakdown: USD 830mm of Investment Grade, USD 960mm of High Yield bonds and USD 300mm of Non-Rated bonds.
The Asia primary bond market remains sidelined with continuing concerns over deteriorating macro-economic conditions and heightened US rates volatility. Chinese companies continue to be the main drivers of primary issuance. Orient Securities priced a dual currency deal while Greenko Energy Holdings returned to tap the dollar bond market.
Greenko Energy Holdings returned to the offshore bond market to price USD 350mm of 3.5 year non-call 1.5 year bonds at 6.25% yield. The Indian energy company last priced a dual tranche deal(green bonds) in July this year at tighter levels:
- USD 500mm of 5.5NC2.5 bonds @5.55%
- USD 450mm of 7NC3 bonds @5.95%
The 70bp pricing differential between the new issue and the existing 4.875% 2023 bond reflects the structural differences between senior unsecured holdco structure of the new bond versus the senior secured opco structure of the existing 4.875% 2023s. The new 3.5 year bonds attracted strong demand from US investors, who took 41% of allocation.
For the week, 30 banks have been involved as Bookrunners or Lead Managers. Industrial Bank was the most active Bookrunner during the week, participating in 5 deals that were priced.
The new issue pipeline weakens with only 1 new mandates announced in the week, yet to price.