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S&P fell 0.5% and Nasdaq was down 1% as equities slipped across the board. Tesla shares were down 3.4% after a fatal crash involving one of its autonomous cars. US10Y Treasury yields firmed 5bp to 1.61%. European equities also fell with DAX down 0.6% and FTSE down 0.3%. Prospects of a higher post-election government spending saw German Bund yields firm 3bp to -0.23%. US IG CDS spreads were 0.4bp wider and HY was 2.7bp wider. EU main CDS spreads were 0.5bp wider and crossover spreads tightened 3.6bp. Asian equity markets are muted today after Wall Street’s losses yesterday and Asia ex-Japan CDS spreads continue to tighten rapidly following easing of Huarong’s concerns, down 5.8bp.
Olam raised S$100mn via a tap of their 5.375% subordinated Perpetual non-call 2026s at a yield of 5.375%, unchanged from initial guidance of 5.375% area. Proceeds from the unrated notes will be used for debt refinancing and/or other purposes. If the notes are not called in 2026, the coupon will reset to the original 480.7bp spread over 5Y SOR plus a step-up by 200bp. The coupon will reset every five years thereafter.
Goldman Sachs raised $675mn via a Perpetual non-call 5Y (PerpNC5) at a yield of 3.8%, 57.5bp inside initial guidance of 4.375% area. The bonds have expected ratings of Ba1/BB/BBB-. The bonds are callable every 6 months starting May 10, 2026 and if not called on that date, the coupon resets to the 5Y US Treasury yield + 296.9bp. Proceeds will be used to redeem all of their outstanding Series N preferred stock.
Putian State-owned Assets Investment raised $180mn via a 3Y bond at a yield of 4.7%, 30bp inside initial guidance of 5% area. The bonds have expected ratings of BB+ and proceeds will be used for investments in domestic project construction and working capital purposes. The issuer is wholly-owned by the government of Putian municipality of China’s Fujian province. The issuer engages in infrastructure and resettlement housing construction, real estate sales and commodity trading.
China Water Affairs Group $ green bond
BOC Aviation $ bond
A ‘tap’ refers to a bond issuance wherein the issuer issues more of an existing bond rather than issue a new bond. Taps, also known as reopenings, are common in the bond market and can be quoted as a price or yield during the initial price guidance stage of issuance.
Kaisa Group today morning has capped a tap of their 9.75% 2023s at $200m with an initial guidance at 9.45% area.