US markets ended lower on Friday mainly pulled down by the tech and consumer discretionary sectors. S&P was marginally down by 0.1% while Nasdaq was down by 0.5%. While Apple dropped 1.5%, Amazon 1.4% and Tesla 1%, Nvidia continued trending higher by 2.6%. US 10Y Treasury yields fell ~1bp to 1.62% as the Dallas Fed data indicated that they expected lower growth in jobs in the US for May, stating that while business hiring demand remains high, the supply of people willing or able to work is lower. In European Indices, FTSE ended flat while DAX and CAC were up 0.5% and 0.7%. US IG CDS spreads were 0.2bp wider and HY spreads were 1bp tighter. EU main spreads were 0.6bp wider and crossover spreads were 3.3bp wider. Asian equities have witnessed a mixed start – Nikkei and Shanghai are up 0.5% and 0.2%, Hang Seng is down ~0.3% with Asia ex-Japan CDS spreads widening 0.4bp.
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New Bond Issues
- Kaisa Group $ 5NC3 sustainable notes at 12% area
- CK Infrastructure $ fixed-for-life sub PerpNC5 at 4.5% area; books over $600mn
- ESR Cayman tap of S$ 5.65% PerpNC5 at 100 area/5.64% YTC
- Guoren Property and Casualty Insurance $ 5Y IPG T+300bp area; books over $1.75bn
New Bond Pipeline
- Chinalco hires for $ senior bonds
- CMB International Capital $ bond
- Jiujiang Municipal Development Group hires for $ bond
- Shandong Fi-nance Investment hires for $ bond
- AAC Technologies Holdings $ bond offering
- Jiangsu Shagang Group $ bond issue
- Jinke Property Group hires for $ bond issue
- Zhongyu Gas hires for $ bond offering
- Maldives HDC $ sukuk
- Italian Utility Edison SpA Upgraded To ‘BBB’ By S&P On Improved Performance And Credit Metrics; Outlook Stable
Fitch Upgrades Postal Savings Bank of China’s VR to ‘bbb-‘; Affirms Long-Term IDR at ‘A+’
Fitch Upgrades Agricultural Bank of China’s VR to ‘bbb-‘; Affirms Long-Term IDR at ‘A’
Fitch Upgrades ICBC’s VR to ‘bbb’, Affirms Long-Term IDR at ‘A’: Outlook Stable
- Fitch Affirms Banco Industrial’s IDR at ‘BB-‘; Outlook Revised to Stable
- Moody’s changes outlook on Peru’s A3 rating to negative; affirms ratings
- Moody’s changes Tapestry’s outlook to stable; affirms Baa2 senior unsecured rating
- Moody’s changes Brinker’s outlook to positive; affirms B1 CFR
- Moody’s changes outlooks of three Korean regional banks to stable from negative; affirms ratings
The Week That Was
US primary market issuance dipped to $33.5bn, down 34% vs. $50.8bn in the week prior. The drop can be attributed primarily to IG issuances, which were at $20.7bn vs. $37.2bn in the prior week while HY issuances were at $12.1bn vs. $12.7bn in the prior week. The largest deals in the IG space were led by UnitedHealth’s $6bn four-trancher followed by BofA’s €4bn ($4.8bn) and Athene Global Funding’s $1.5bn issuance. In the HY space, Square’s $2bn two-trancher and Tenet Healthcare’s $1.4bn led the issuances. In North America, there were a total of 68 upgrades and 28 downgrades combined across the three major rating agencies last week. LatAm saw no new dollar bond deals last week. EU Corporate G3 issuance saw a marginal increase last week to $26.3 vs. $25.1bn in the week before led by HSBC’s $5bn dual-trancher, Credit Suisse’s €1.5bn ($1.8bn) and DTEK’s €1.35bn ($1.64bn) deals. Across the European region, there were 32 upgrades and 12 downgrades across the three major rating agencies. GCC bond and sukuk G3 issuances were at $1.2bn vs. a mere $33mn in the week prior – Emirates NBD’s $750mn AT1 led the list followed by QIB’s $150mn Sukuk. Across the Middle East/Africa region, there was 1 upgrade and downgrade each, across the three major rating agencies. APAC ex-Japan G3 issuances were lower at $4.7bn vs. $9.9bn in the prior week – National Australia Bank led with a $1.25bn issuance followed by UOB’s €750mn ($900mn) covered bond and CIMIC’s €510mn ($611mn). In the Asia ex-Japan region, there were 15 upgrades and 6 downgrades combined across the three major rating agencies last week.
Term of the Day
On investors increasingly drawn to ESG bonds – Andrew Inwood, founder and principal of CoreData