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ICBC raised $3.23bn-equivalent via a multi-currency carbon neutrality themed bond deal.
The bonds have expected ratings of A1 (Moody’s). Proceeds will be used to finance and/or refinance eligible green assets under ICBC’s green bond framework that has received a second party opinion from Sustainalytics and an assessment report from Beijing Zhongcai Green Financing Consultant. The new 3Y green bonds issued by the Singapore branch are priced 44.3bp wider to its existing 0.95388% green 2024s that yield 0.62%.
Far East Horizon raised $300mn via a 5Y bond at a yield of 4.38%, 20bp inside initial guidance of T+340bp area. The bonds have expected ratings of BBB–(S&P). The issuer is a key state-owned assets operating entity carrying out engineering and infrastructure construction, commercial sales, water supply and sewage treatment, transportation, power generation and real estate development in Zhaoqing city, Guangdong province in China.
Huzhou City Investment Development raised $200mn via a 5Y bond at a yield of 2.95%, 30bp inside initial guidance of 3.25%. The bonds have expected ratings of BBB (Fitch), and received orders over $1bn, 5x issue size. Proceeds will be used to replenish working capital and for general corporate purposes. Huzhou City Investment engages in urban infrastructure construction, property development, water supply and gas supply in Huzhou city in China’s Zhejiang province.
Zhaoqing Guolian Investment Holding raised $300mn via a 3Y green bond at a yield of 2.68%, 32bp inside initial guidance of 3% area. The bonds have expected ratings of Baa3/BBB– (Moody’s/Fitch). Proceeds will be used in accordance with the issuer’s sustainable financing framework. The state-owned issuer is an ‘assets operating entity’ carrying out engineering and infrastructure construction, commercial sales, water supply and sewage treatment, transportation, power generation and real estate development in Zhaoqing city, Guangdong province in China.
S&P Global Ratings Upgrades Multiple Tata Group Entities On Revised Group Assessment
Rising stars are companies that have recently seen credit rating upgrades that pull its rating to investment grade category from its previous junk or high yield category. They are termed as rising stars as their financial and/or operational metrics show an improving trend. Tata Steel is among the latest rising stars as its senior unsecured bonds were upgraded by a notch to BBB-. The opposite of rising stars are fallen angels, which are issuers that have been downgraded to junk category from its previous investment grade rating category.
On Evergrande Averting a Default on its Dollar Bonds
A Hong Kong-based debt restructuring lawyer
“They seem to be avoiding short-term default and it’s a bit of a relief that they have managed to find liquidity. But still, Evergrande does need to restructure its debt. This payment might be a way for them to get some sort of buy-in with stakeholders before the heavy work needed on the restructuring.”
James Wong, portfolio manager at GaoTeng Global Asset Management
“This is a positive surprise… The news would boost bondholders’ confidence, he said, as “there are many coupon payments due ahead. If Evergrande pays this time, I don’t see why it won’t pay the next time.”
Travis Lundy at Quiddity Advisors in Hong Kong
“Given that we have little clarity on how bank financing is going for stalled real estate projects, but we know that project pre-sales are down a lot, the onshore business is unlikely to be supplying cash to Evergrande near-term”
On Princeling’s Surprise Default Roiling Global Investors in China
Nigel Stevenson, a Hong Kong-based GMT Research analyst
“The smaller developers will be disproportionately affected — even those that are well connected”
Charles Macgregor, Head of Asia at Lucror Analytics
“The reason it was such a shock is because the company had advised investors in the prior week that the bond would be taken out… Hence, the question arises of willingness to pay rather than ability.”
Willy Lam, an adjunct professor at the Chinese University of Hong Kong’s Centre for China Studies
“The crackdown on the real estate industry affecting many top companies like Evergrande or princeling businesses like Fantasia can be seen as a substantial effort by Xi to reinstate the quasi-Maoist ideal of common prosperity”
On U.K. Selling the World’s Longest Green Bond to Grab Pension Fund Cash
Pooja Kumra, senior European rates strategist at TD Securities
“Demand was strong since the gilt is a longer bond in this volatile market… The back-up in yields and pension fund and liability-driven investment demand provided extra support for this issue.”
Ben Clissold, head of fixed income and treasury at USS Investment Management
“We did participate in this as it is more an area of the curve where we generally invest… We would be keen to see the DMO issue longer-dated nominal and inflation-linked green gilts.”
On Rising home prices not posing financial stability risks – Fed’s Williams
“Banks are much better capitalized, much better positioned in terms of risks to them from a downturn in the housing market. There is also less credit risk in the housing market now than there was before the last financial crisis”