Asian issuers took quite a fancy to EUR markets this week

New Issue Weekly Monitor

For the week beginning 7th Oct 2019
Asia ex-Japan G3


Asia G3 Year-to-date issuance: USD 272.95bn

Key Market Data (as at 12pm, 11 Oct 2019)
CT10 @ 1.666% (+13.5bps Week-on-Week)
S&P 500 @ 2,938.13 (-0.49% Week-on-Week)
HSI @ 26,271.36 (+1.74% Week-on-Week)
JACI Index @ 242.24 (-0.18% Week-on-Week)

For the week beginning 7th Oct 2019, USD 15.71bn of bonds was issued from 18 deals.

Breakdown: USD 13.67bn of Investment Grade, USD 1.79bn of High Yield bonds, USD 250mm of Non Rated bonds.

** As of this Friday morning, Jiayuan International Group Ltd. is out with a new 3.3yr deal at IPG 13.763%. **

*** Note: Q3 2019 report published in lieu of 30th Sept weekly commentary.***

As China rested during Golden Week, macro-economic data came fast and furious out of the US. ISM manufacturing numbers for September registered their worst contraction since 2009 and remain for the second month in contractionary territory.  ISM non-manufacturing also roundly missed expectations, but markets arrested their swan dive as renewed optimism about a trade deal and a positively interpreted non-farm payrolls report gained focus. Coupled with the latest flattish CPI readings, the Treasury curve steepened at the 2-yr pivot over the fortnight.

Closer to home, increasingly violent protests rocked Hong Kong last week, causing massive disruption to public transport and places of business. This did not deter HK issuer CK Hutchison Group Telecom Holdings (CKT) from issuing a jumbo size 5.65bn deal denominated in EUR and GBP in six tranches. The Baa1-rated bonds, issued by the European/HK telecommunications arm of conglomerate CK Hutchison Group, were rated 2 notches below the parent and garnered an average 1.8x demand.

Aside from CKT, other Asian issuers took quite a fancy to EUR markets this week, with established names like Shinhan Bank, Export-Import Bank of China and Bank of China taking advantage of rates near all-time lows. The latter two, in fact, pulled off issuing 5yr 700mn and 2yr 300mn bullet bonds returning an absolute coupon of 0% but priced against mid-swaps at 50bps and 48bps respectively.

Bharti Airtel printed India’s first corporate perpetual in six years with a 750mn offering priced at 5.65%. The NC 5.5 was 2x covered and tightened 35bps from IPG, against the backdrop of a brutal price war in its home market and a downgrade to junk earlier this year. 

Ba3-rated Indonesian textile manufacturer Sri Rejeki Isman Tbk (Sritex) issued a long 5yr 225mn bond at 7.25% for refinancing and working capital purposes.

Oil refiner Thai Oil issued a 30yr Regs + 144a issue at T+145bps, 35bps lower than IPG. The Baa1-rated senior issue is ranked pari passu to parent PTT and ultimate parent Kingdom of Thailand. In a week of relatively muted response to primary issues, the 565mn issue boasted the highest reported book coverage of its cohort at 3x.

State-owned hydropower player China Three Gorges came to market via wholly owned subsidiary Three Gorges Finance with 5 and 30-year offerings priced at T+95bps and 3.2% respectively. The 850mn deal was taken up mostly by Asian FIs, with a skew to banks for the former and asset managers for the latter.

Backed by China’s top real estate developers and e-commerce giant Alibaba, BB-rated real estate services firm E-House entered the USD bond markets for the second time with issuance of a 200mn 2.5yr at senior bond at 8.375% yield. E-House is the largest real estate agency in China’s primary market by revenue and the number of cities covered, according to property consultancy Cushman & Wakefield.    

For the week, 40 banks were involved either as Bookrunners or Lead Managers. Credit Agricole and HSBC were tied for most deals done (8) and credit for highest volume done went to HSBC.

Ten new mandates were announced during the last two weeks. 

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