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New Bond Issues
- Central Nippon Expressway 5Y bond at Mid-Swaps+35bp area
- PCGI Holdings $ 5NC3 at 4.5% area
Chongqing International Logistics Hub Park Construction raised $160mn via 5NC3 bonds at a yield of 5.3%, 45bps inside initial guidance of 5.75% area. The bonds have an expected rating of BBB- and received orders over $460mn, 2.9x issue size. Asia took 97% of the bonds and Europe 3%. Banks and financial institutions received 96% and private banks 4%. Proceeds will be used for debt refinancing.
New Bonds Pipeline
- HDFC Bank hires for $ PerpNC5
- Perusahaan Pengelola Asset hires for $ bond
- Ping An International Financial Leasing hires for $ bonds; calls tomorrow
- Henan Investment Group hires for $ bonds; calls tomorrow
Rating Changes
- Fitch Upgrades Gran Tierra’s IDR to ‘CCC+’
-
Moody’s affirms Ireland’s A2 ratings, changes outlook to positive from stable
- Fitch Downgrades Agung Podomoro to ‘CCC’ on Weaker Liquidity
- Argentine Conglomerate CLISA Downgraded To ‘SD’ From ‘CC’ By S&P Following Exchange Offer, ‘CCC’ Rating On New Notes Affirmed
- PBF Holding Co. LLC, PBF Logistics L.P. Downgraded To ‘B’ From ‘B+’ By S&P On Weak Margins; Outlook Negative
- Westinghouse Air Brake Technologies Corp. Outlook Revised To Stable From Negative By S&P On Strong Operating Performance
- Midland Cogeneration Venture L.P. Debt Outlook Revised To Stable From Negative By S&P; ‘BB’ Rating Affirmed
- Fitch Revises Yorkshire Building Society’s Outlook to Stable; Affirms at ‘A-‘
- Fitch Revises Coventry’s Outlook to Stable; Affirms at ‘A-‘
Term of the Day
Risk-off
Risk-off is an indication of global market sentiment wherein investors switch out from risky assets (i.e. risk-off) into safer assets on the back of increased uncertainty. This can be due to geopolitical risk, poor economic data or a crisis. The most noteworthy risk-off event this year was in late March 2020, when fears about the coronavirus pandemic pushed financial markets lower across the board. Most typically, during a risk-off environment, US Treasuries and gold tend to perform better as they are considered safe haven assets. On the other hand, risk-on indicates positive investor sentiment wherein investors switch into risky assets (i.e. risk-on) from safer assets on improved prospects of economic growth. This can be due to improved political environment, strong economic data, strong corporate earnings, or a recovery from a crisis.
Talking Heads
“Supply is a big story that is not being talked about.” “The fundamentals ultimately drive things, but I do think the lack of supply . . . makes the [Fed] taper somewhat irrelevant.”
“Global liquidity is massive. That is definitely going to put a cap on US long yields or just be a weight on them going forward.”
“If there’s no clarity on a turnaround story, it would be brave to stick your neck out.” “The market is cheap, but it could get cheaper,” Ms. Chow added.
