S&P nudged marginally lower while Nasdaq made a recovery of 0.9%. While Energy and Financials were down over 3%, IT and Healthcare were up 1.2%, and 0.8% helping the indices. US 10Y Treasury yields dipped 5bp to 1.52%. European markets remained cautious – DAX and CAC were up 0.1% and 0.2% respectively while FTSE was down 0.4%. US IG CDS spreads widened 0.3bp while HY CDS tightened 0.3bp. EU main and crossover CDS tightened 0.1bp and 0.2bp respectively. Saudi TASI was largely flat while Abu Dhabi’s ADX was down 0.8%. Brazil’s Bovespa was down 0.9%. Asian markets have a mixed start with Shanghai flat and HSI up 0.8%. Asia ex-Japan CDS spreads were 0.9bp wider.
Navigating The Bond Markets by Leveraging the BEV App
New to the BEV App? BondEvalue will be conducting a complimentary session on Navigating The Bond Markets by Leveraging the BEV App on June 23, 2021. This session is aimed at helping bond investors in tracking their investments using the BondEvalue App.
New Bond Issues
- Jinan Hi-Tech Holding capped $170mn 3Y bond at 3% area
Sino-Ocean Capital Holding raised $500mn via a 2Y bond at a yield of 6.25%, 25bp inside initial guidance of 6.5% area. The bonds were unrated and received orders over $1.5bn, 3x issue size. The bonds will have a letter of support from Chinese property developer Sino-Ocean Group Holding (Baa3/BBB–) which indirectly owns 49% of Sino-Ocean Capital. Proceeds will be used for project investment and development, and for general corporate purposes.
Banco Santander raised €1bn ($1.2bn) via an 8Y non-call 7Y (8NC7) green bond at a yield of 0.671%, 27bp inside initial guidance of Mid-swaps + 105bp area. The bonds are rated Baa1/A-/A- and received orders over €2.5bn, 2.5x issue size. Proceeds will be used for ‘eligible green projects’ under Santander’s global sustainable and green bond frameworks. The bond is callable at par on Jun 24, 2028.
Julius Baer raised €500mn ($600mn) via a 3Y bond at a yield of 0%. The bonds have expected ratings of A3 and received orders over €850mn, 1.7x issue size.
Deqing Construction & Development Group raised $150mn via a 3Y bond at a yield of 3.6%, 50bp inside initial guidance of 4.1% area. The bonds were unrated. Proceeds will be used for domestic project construction, working capital and general corporate purposes.
- Moody’s upgrades United States Steel’s CFR to B1; outlook stable
- Moody’s upgrades DCP Midstream’s CFR to Ba1; stable outlook
- Fitch Upgrades Polyus to ‘BB+’; Outlook Stable
- Fitch Upgrades Usiminas to ‘BB’; Stable Outlook
- Fitch Downgrades Credito Real’s IDRs to ‘BB’ from ‘BB+’; Outlook Negative
- Moody’s downgrades William Hill to B1; outlook negative
- Fitch Removes Telecom Argentina’s FC IDR from Negative Watch; Assigns Stable Outlook
- Fitch Affirms Rockies Express Pipeline LLC at ‘BB+’ and Removes Negative Watch; Outlook Stable
- Mercer International Inc. Outlook Revised To Stable From Negative By S&P On Improved Credit Metrics; ‘B+’ Rating Affirmed
- Wyndham Hotels & Resorts Inc. Ratings Placed On CreditWatch Positive By S&P On Lodging Demand Recovery
Term of the Day
Floating Rate Bonds are also known as floaters or FRNs (floating rate notes). These are bonds with a variable interest rate unlike fixed rate bonds. Floaters are considered attractive for investors in a rising interest rate environment since the interest rate/coupon gets re-adjusted periodically (semi-annually/quarterly etc.), linked to benchmark rates such as SOFR or LIBOR. For example, as part of Verizon’s $25bn jumbo 9-part issuance, they issued two floaters – a 0.52% 2024 at SOFR + 50bp and a 0.81% 2026 at SOFR + 79bp. Bloomberg reports that US IG issuance of floaters have seen a sharp rise this year.
attractive time for global investors to allocate to the region.”
“In the current circumstances, I’m less worried than normal about slowing credit and money growth,” she said.