US markets continued to fall for the third straight day, with S&P ending lower by 0.3% and Nasdaq marginally lower by 0.03%. While the markets opened with a sell-off, they cut losses before close led by chip-stocks with AMD up 2.4%, TSMC and Qualcomm up 1.4%. The Fed in its policy meeting gave indications that members were ready to think about talking about tapering if growth continued to meet the goals of the committee. European equity indices closed lower – FTSE was down 1.2%, DAX was down 1.8% and CAC slipped 1.4%. US 10Y Treasury yields climbed slightly to close at 1.67%. Crude fell ~3% as stockpiles increased amid lower demand as Covid-19 cases rose. The US IG CDS spreads were 0.4bp wider and HY spreads were 2.2bp wider. EU main spreads were 0.8bp wider and crossover spreads widened 4.8bp. Asian equities have started lower 0.4% with Asia ex-Japan CDS spreads tightening 0.7bp.
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New Bond Issues
- Changxing Urban Construction $ 3Y credit-enhanced green bond at 2.8% area
- Nanning Communications Investment Group $ 3Y at 3.9% area
Hotel Properties (HPL) raised S$125mn ($94mn) via a 7Y bond at a yield of 3.75%, 15bp inside initial guidance of 3.9% area. The bonds were unrated and are issued off a S$1bn ($751mn) multicurrency debt issuance programme. There was a 15-cent rebate for private bank orders.
Skyfame Realty raised $112mn via a tap of their 13% 2023s at a yield to put of 13%. The bonds have expected ratings of B-. Proceeds will be used for offshore debt refinancing. Skyfame International Holdings is the issuer and the parent company is the guarantor.
New Bond Pipeline
- Jinke Property Group hires for $ bond issue
- Zhongyu Gas hires for $ bond offering
- Guoren Property and Casualty Insurance hires for $/CNH bonds
- Maldives HDC $ sukuk
- Fitch Upgrades Tata Steel to ‘BB’; Outlook Stable
- Antero Midstream Partners L.P. Upgraded To ‘BB-‘ From ‘B’ By S&P Following The Upgrade Of Its Parent, Outlook Stable
- Abbott Laboratories Upgraded To ‘A+/A-1+’ By S&P As EBITDA Growth Surpasses Expectations; Outlook Positive
- Colombia Long-Term Foreign Currency Rating Lowered To ‘BB+’ On Persistent Fiscal Weakness; Outlook Stable
- Simon Property Group Inc. Downgraded To ‘A-‘ By S&P Due To The Difficult Operating Environment; Outlook Stable
- Fitch Downgrades Lloyds Banking Group’s IDR to ‘A’ on Lower Debt Buffers; Affirms Subsidiaries
- Fitch Downgrades Washington Prime Group to ‘RD’
- Fitch Revises Intrum’s Outlook to Stable; Affirms at IDR ‘BB’
- Fitch Revises Outlook on JSW Steel to Positive from Negative; Affirms at ‘BB-‘
- Fitch Revises Outlook on Macquarie Group and Australian Subsidiaries to Stable; Affirms Ratings
- Moody’s changes Under Armour’s outlook to positive; affirms Ba3 CFR
- Fitch Assigns ‘BB-‘ First-Time IDR to Delek Logistics Partners, LP; Outlook Negative
- Fitch Affirms and Withdraws Landsea’s Ratings
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Term of the Day
“We are optimistic that financial and economic conditions will bounce back.” “There is, however, a reality that the pandemic will leave a legacy of higher debt and weaker balance sheets, which — if unaddressed — could prompt sharp market corrections and financial stress or lead to a prolonged period of weak economic recovery.” “It is very important for governments to lay out fiscal consolidation plans that are credible.”
Althea Spinozzi, fixed income strategist at Saxo Bank