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New Bond Issues
India Cleantech Energy/Acme Solar $ amortising 5NC3 green bond at 5% area
Chengdu Xingjin Construction Development and Investment Group $ 3Y final at 3.7%
- Yantai Penglai District Construction Investment capped $50mn 364-day note final at 4.95%
- ABM Investama $ 5NC3 at 9.875% area, alongside concurrent tender offer
ESR REIT raised S$125mn via a 5Y bond at a yield of 2.6%, 15bp inside initial guidance of 2.75%. The bonds are unrated. The issuer is RBC Investor Services Trust Singapore, in its capacity as the REIT’s trustee. Proceeds will be used for debt refinancing, financing or refinancing of acquisitions and investments, funding development and asset enhancement works, as well as supporting working capital needs and capital expenditure. This is the REIT’s first issuance since it priced an S$150mn 4.6% PerpNC5 in 2017.
New Bonds Pipeline
Gemdale Corp hires for $ green bonds
Chindata Group hires for $ green bonds; calls today
Chongqing International Logistics Hub Park Construction hires for $ bonds; calls today
- Brazilian Rental Co. Movida Upgraded To ‘BB-‘ And ‘brAA+’ On Incorporation Of CS Participacoes, Outlook Stable
- Fitch Downgrades Evergrande and Subsidiaries, Hengda and Tianji, to ‘CCC+’
- Fitch Revises IGH’s Outlook to Stable; Affirms IDR at ‘BB+’
- Fitch Revises Arauco’s Rating Outlook to Stable; Affirms IDR at ‘BBB’
- Petrobras’ Stand-Alone Credit Profile Revised Up To ‘bb+’ By S&P; ‘BB-‘ Rating Affirmed On Sovereign Cap; Outlook Stable
- Advanced Micro Devices Inc. Ratings Remain On CreditWatch Positive by S&P; Upgrade To ‘BBB+’ Likely On Xilinx Acquisition
- EuroChem Upgraded To ‘BB’ By S&P On Improved Free Operating Cash Flows Amid A Stronger Market; Outlook Stable
ICYMI: Chinese Developers’ Bond Spreads Widen as Focus on Three Red Lines Increases
In case you missed it – China’s real estate developers’ high yield Index underperformed its peers witnessing a sharp drop of 6% in June and down 3.7% YTD. Investor concerns were apparent since the start of Q2 with Z-Spreads widening across certain Chinese real estate developers. China Evergrande’s Z-Spread widened by a massive 1,800bp since April, the highest in the sector as investor concerns grow over its liquidity position. The ‘three red-lines’ (Term of the Day, explained below), a key regulatory threshold for property developers set by Beijing has become an important factor that separates the winners and the losers.
In this editorial piece, we detail the widening Z-Spreads across companies in the Chinese property sector, the sector’s underperformance, and the three red-lines calculations of the key players.
Term of the Day
Hawkish is a term used to describe a monetary policy stance where policymakers are concerned about inflation or overheating risks and therefore adopt a tightening stance. A hawkish stance could be either in the form of rate increases, asset purchases decreases or even indications on the same relative to market expectations. This is the opposite of a dovish stance, where the monetary policy stance is more accommodative in nature. In yesterday’s FOMC meeting, analysts expected a slight hawkish tilt to the central bank decision regarding a timeline or greater details on planned asset purchase decreases. But, Chairman Powell did not signal any of that and rather indicated that there was still time to decide on that.
Top Gainers & Losers – 29-Jul-21*