US markets ended higher with the S&P up 1% while the tech heavy Nasdaq up by 1.4%. Tesla closed higher by 4.4%, Microsoft was up 2.3%, while Apple and Amazon were up 1.3%. US 10Y Treasury yields dipped slightly to end at 1.61%. European Indices also closed higher by ~0.4% – FTSE was up 0.5%, while DAX and CAC closed higher by 0.4%. US IG CDS spreads were 1.1bp tighter and HY spreads were 3.2bp tighter. EU main spreads were 0.8bp tighter and crossover spreads were 4.7bp tighter. Asian equities have followed the track of the US equities with initial gains of ~1%. Asia ex-Japan CDS spreads tightened 1.9bp. Asian primary markets are busy ahead of the Vesak day holiday in Singapore on Wednesday.
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New Bond Issues
- Abu Dhabi $ 7Y at T+70-75bp
- Westpac $ 5Y fixed/floater at T+62.5bp/SOFR equiv. area, 10Y at T+87.5bp area
- OUE Commercial REIT S$ 5Y at 4.15% area
- CMB International Capital 3yr $ bonds at T+150bp area
- Jiangsu Shagang Group capped $300m 3yr at 3.8% area
- Zhongyu Gas $ 3yr bonds at 6.1% area
- AAC Technologies $ 5yr/10yr at T+225bp/T+270bp area
- Jiujiang Municipal Development Group capped $300m 3yr bonds at 3.9% area
- Chinalco $ 5yr senior bonds IPG T+185bp area
- Jinke Property $ 3yr at 7.7% area
Kaisa Group raised $300mn via a 5Y non-call 3Y (5NC3) sustainable bond at a yield of 11.65%, 35bp inside the initial guidance of 12% area. The bonds have expected ratings of B2/B, and received orders over $2.5bn, ~8.3x the issue size. Asia took 90% and Europe 10%. Fund managers received 81%, private banks 15%, corporates 3% and financial institutions 1%. The bonds were priced 37bp over their 11.7% 2025s callable in 2023 that are currently yielding 11.28%. The proceeds are likely to be used to finance the offshore debt.
JPMorgan raised $4.5bn via a three-trancher. It raised:
- $2bn via a 4NC3 bond at a yield of 0.824%, 20bp inside initial guidance of T+70bp area
- $500mn via a 4NC3 floater (FRN) at SOFR+53.5bp vs. guidance of SOFR equivalent
- $2bn via an 8NC7 bond at a yield of 2.069%, 20bp inside initial guidance of T+100bp area
The bonds have expected ratings of A-. Proceeds will be used for general corporate purposes. The bonds have an optional redemption one year prior to maturity on all tranches and are callable at par 1 month, 1 month and 2 months prior to maturity. Barring the FRN, the other two bonds have a make whole call beginning December 1, 2021.
UBS raised $3bn via a three-trancher. It raised:
- $1bn via a 2Y bond at a yield of 0.429%, ~19.5bp inside initial guidance of T+45/50bp area
- $1bn via a 2Y floater (FRN) at SOFR+32bp vs. guidance of SOFR equivalent
- $1bn via a 5Y bond at a yield of 1.33%, ~19.5bp inside initial guidance of T+70/75bp area
The bonds have expected ratings of Aa3/A+/AA-. Proceeds will be used for general corporate purposes.
Bank of America raised $1.25bn via a 3Y non-call 2Y (3NC2) floater (FRN) at a yield of 0.547%, 2bp inside the initial guidance of 3mBSBY+45bp area (the Bloomberg 3 Month Short Term Bank Yield index). The bonds have expected ratings of A2/A-, in line with the issuer rating. The bonds have a par call 1 year prior to maturity (May 28, 2023) and anytime on or after May 28, 2024. The proceeds will be used for general corporate purposes.
ESR Cayman raised S$150mn ($113mn) via a tap of their S$ 5.65% Perpetual non-call 5Y (PerpNC5) at 100/5.64%, unchanged from initial guidance of 100 area/5.64% YTC. The bonds are unrated and received orders over S$210mn, 1.4x issue size. If the notes are not called, the coupon will reset every five years to the 5Y SOR + initial spread of 473bp along with a coupon step-up of 200bp. Proceeds will be used for refinancing debt, financing potential acquisition and investment opportunities, working capital requirements and general corporate purposes. There is a 25 cent rebate for private bank orders.
Guoren Property and Casualty Insurance raised $560mn via a 5Y bond at a yield of 3.35% or T+260bp, 40bp inside the initial guidance of T+300bp area. The bonds have expected ratings of BBB+ and received orders over $2.5bn, 4.5x the issue size. It also raised CNY 250mn ($39mn) via a 2Y bond at a yield of 4.2%, 35bp inside the initial guidance of 4.55%. The proceeds of the bonds are likely to be used for general corporate purposes. Shenzhen Investment Holdings owns 41% of Guoren P&C, which offers motor, commercial property, liability and accident and health insurance.
CK Infrastructure raised $300mn via a fixed-for-life Perpetual non-call 5Y (PerpNC5) at a yield of 4.2%, 30bp inside initial guidance of 4.5% area. The bonds have expected ratings of BBB, and received orders over $1.2bn, 4x issue size. There is a 20 cent rebate for private bank orders. This is CK Infra’s first dollar bond issuance since 2017. As per IFR, CK Hutchison holds a 71.93% stake in CK Infra and this is the first USD fixed-for-life offering in Asia since sister company CK Asset sold a $300mn PerpNC3 in September last year.
Fujian Yango Group raised $125mn via a tap of their 12% 2024s at a yield of 12%. The bonds have expected ratings of B-. Yango (Cayman) Investment is the issuer and Fujian Yango Group is the parent guarantor. Proceeds will be used for offshore debt refinancing and the development of its education business.
New Bond Pipeline
- Greenland Hong Kong hires banks for $ bond offering
- Pakistan WAPDA $ green bond
- Shandong Fi-nance Investment hires for $ bond
- Maldives HDC $ sukuk
- Ras Laffan Liquefied Natural Gas Co. Ltd (3) Issue Rating Raised To ‘A+’ From ‘A’ By S&P On Reduced Leverage; Outlook Stable
- Belize Foreign Currency Ratings Lowered To ‘SD/SD’ By S&P On Missed Coupon Payment And Risk Of External Bond Restructuring
- Bank of America Corp. Outlook Revised To Positive By S&P On Strength Of Franchise, Risk Management, And Declining Industry Risk
- JPMorgan Outlook Revised To Positive By S&P On Franchise Strength And Declining Industry Risk; Ratings Affirmed
- Morgan Stanley Holding Company Outlook Revised To Positive By S&P On Strategic Initiatives Progress And Declining Industry Risk
- Various Rating Actions Taken On Large U.S. Banks And Consumer-Focused Banks By S&P Based On Favorable Industry Trends
- Cimarex Energy Co. Ratings Placed On CreditWatch Positive By S&P On Planned Merger With Cabot Oil & Gas