S&P was up 0.7% while the tech-heavy Nasdaq was lower again by 0.4%. Macro data underscored the economic recovery as US ADP payroll additions for the prior month came in at 742k, a strong number, although lower than expectations of 800k. Also ISM Non-Manufacturing in April fell only slightly to 62.7 vs. expectations of 64.2 and the prior 63.7 reading. US 10Y Treasury yields were flat at 1.59%. US IG CDS spreads were 0.3bp wider and HY widened 1.2bp. EU main CDS spreads were 0.5bp tighter and crossover spreads tightened 3.2bp. Asian equity markets are mixed while Asia ex-Japan CDS spreads were 0.2bp wider.
New Bond Issues
- BOC Aviation tap of $ 1.625% 2024s at T3+155bp area
- Powerlong Real Estate capped $200m 5NC3 at 5.7% area; books $1.5bn
- eHi Car Services $ 3.5NC2.5 at 8.5% area, alongside tender offer
- ENN Natural Gas $ 5NC3 bonds at T+320bp area
- Golden Energy and Resources $ 5NC3 bond at 9% area
- KB Kookmin Card $ 5Y sustainability bond at T+110 area; books over $1bn
Naver raised $300mn via a tap of their 1.5% 2026 sustainability bond at a yield of 1.685%, 25bp inside initial guidance of T+110bp area. The bonds have expected ratings of A3/A-. Proceeds will be used to finance or refinance eligible green and social projects under Naver’s sustainable finance framework. Following the tap, the total amount outstanding on the bond is now at $800mn.
Commercial Bank of Qatar (CBQ) raised $700mn via a 5Y bonds at a yield of 2.054%, 30bp inside initial guidance of MS+145bp area. The bonds have expected ratings of A3/BBB+/A and received orders over $1.3bn, ~2x issue size.
JPMorgan raised $2bn via a PerpNC5 instrument at a yield of 3.65%, a solid 72.5bp inside initial guidance of 4.375% area. If not called on the call date of June 1, 2026, the coupon resets to the prevailing 5Y Treasury rate + 285bp. The instrument is structured as depositary shares each representing 1/10th interest in a share of fixed-rate reset non-cumulative preferred stock, Series KK.
New Bond Pipeline
- Cathay Pacific hires for $ bond
- GLP $ bond
- JSW Hydro $ bond
- GameStop Corp. Upgraded To ‘B’ From ‘B-‘ By S&P, Ratings Removed From CreditWatch Following Debt Redemption And Share Issuance
- InterCement Brasil Upgraded To ‘B’ From ‘CCC’ By S&P On Significant Profitability And Leverage Improvements, Outlook Stable
- Moody’s downgrades Languang Development’s CFR to B2; outlook stable
- Fitch Affirms HP at ‘BBB+’; Revises Outlook to Stable
- Fitch Revises Bausch Health Companies’ Outlook to Negative; Affirms Ratings at ‘B’
- Fitch Places Arcelik’s ‘BB’ Ratings on RWP
- Meredith Corp. ‘B’ Rating Placed On CreditWatch Positive By S&P On The Announced Sale Of Local Media Group Business
- Fitch Places eHi on Rating Watch Positive; Rates Proposed USD Notes ‘B’
- Fitch Affirms Vistra’s IDR at ‘BB+’, Removes Rating Watch Negative, Outlook Stable
- Fitch Assigns First Time ‘B+’ IDR to Quad/Graphics; Outlook Stable
Term of the Day
A tender offer is an offer made by an issuer to bondholders to buyback their bonds. In return, the bondholders could get either cash or new bonds of equivalent value at a specified price. The issuer does this to retire some of its old debt and can use retained earnings to fund the purchases without affecting the liquidity position of the company. Tender offers have a deadline date before which holders must tender their bonds back.
eHi Car Services has launched a 3.5NC2.5 dollar bond alongside a tender offer for its $400mn 5.875% 2022s at a purchase price of $1,002.5 plus accrued and unpaid interest per $1,000 in principal. The deadline is May 14. eHi said the tender offer is part of efforts to proactively manage its balance sheet liabilities and optimise its debt structure.