US markets carved another day of gains as the second half of 2021 kicked off. Jobless claims for the prior week were at 364k, the lowest since the onset of the pandemic. S&P was up 0.5% and the tech heavy Nasdaq was up 0.1%. Most sectors were in the green led by Energy, up 1.7% and Healthcare up 0.9%. US 10Y Treasury yields were stable at 1.47% and investors look forward to the NFP report for June that will be released later today. European markets closed higher buoyed by the sharpest rise in manufacturing activity since 1997. Markit’s Eurozone final manufacturing PMI stood slightly better at 63.4 against estimates of 63.1 – FTSE up 1.3%, CAC up 0.7% and DAX up 0.5%. US IG and HY CDS spreads tightened 0.1bp and 0.7bp respectively. EU main and crossover CDS tightened 0.6bp and 2.5bp respectively. Saudi TASI was largely flat and Abu Dhabi’s ADX was up 0.9%. Brazil’s Bovespa was down 0.9%. Asian markets are again looking for direction – Singapore’s STI and Nikkei were up 0.4% and 0.3% respectively while HSI and Shanghai were down 0.7% and 0.3% respectively. Asia ex-Japan CDS spreads were 0.3bp wider.
New Bond Issues
Turkey raised €1.5bn via a 6Y bond at a yield of 4.5%, 25bp inside initial guidance of 4.75% area. The bonds were unrated. The bonds were priced 45bp over to its 5.2% bonds due 2026 that yield 4.06%. The bonds were issued after raising $2.5bn via a 5Y Sukuk issuance a few weeks earlier at a yield of 5.125%
SocGen raised €1bn ($1.18bn) via a 6Y bond at a yield of 0.266%, 20bp inside initial guidance of T+65bp area. The bonds have expected ratings of A1/A/A received orders over €1.5bn, 1.5x issue size.
New Bond Pipeline
- Fujian Investment & Development Group hires for $ bond issue
- Hyundai Assan Otomotiv Sanayi hires for US$ 5yr bond with HMC guarantee
- Korea Gas Corp hires for $ 5Y and/or 10Y bond
- Laos plans $ bond offering; to repay 2021s
- Moody’s upgrades Enel Americas to Baa2, outlook stable
- PT Alam Sutera Realty Tbk. Ratings Raised To ‘CCC+’ By S&P On Reduced Refinancing And Liquidity Risks; Outlook Negative
- French Steel Tube Producer Vallourec Upgraded To ‘B/B’ From ‘SD/D’ By S&P On Successful Debt Restructuring; Outlook Stable
- IHS Netherlands Senior Unsecured Notes Upgraded To ‘B’ By S&P On Holding Company Guarantee; ‘B-‘ Issuer Credit Rating Withdrawn
- Fitch Downgrades Colombia’s Ratings to ‘BB+’ from ‘BBB-‘; Outlook Revised to Stable
- Fitch Downgrades Angkasa Pura I’s Rating to ‘AA(idn)’; Outlook Negative
- Argentine Conglomerate CLISA Downgraded To ‘CCC-‘ From ‘CCC’ By S&P On Higher Liquidity Pressures, Outlook Negative
- Fitch Affirms Dubai Aerospace Enterprise at ‘BBB-‘; Outlook Revised to Stable
- Russia-Based UniCredit Bank AO Outlook Revised To Stable From Negative By S&P After Action On Parent; ‘BBB-/A-3’ Affirmed
- Fitch Affirms Avolon Holdings Limited at ‘BBB-‘; Outlook Revised to Stable
- Westpac New Zealand Outlook Revised To Stable By S&P On Confirmed Ownership Retention; ‘AA-/A-1+’ Ratings Affirmed
- Moody’s revises outlook for INEOS Group to positive
- Moody’s changes Alam Sutera’s outlook to stable from negative; affirms Caa1 rating
ICYMI: 67% Dollar Bonds Trade Higher in Q2, Staging a Recovery from Q1
In case you missed it, click on the button below to read the report for the quarter ended June with box and whisker plots of price returns of investment grade and high yield bonds, largest deals and top gainers and losers.
Term of the Day
SONIA stands for the Sterling Overnight Interest-rate Average, and refers to the overnight interest rate at which banks would lend funds in the interbank markets, denominated in Sterling. This is considered an effective benchmark and has been identified to replace the GBP LIBOR that will be discontinued from 2022. SONIA is similar to the EONIA rate that will replace the Euribor in Europe.
UOB said that it received approval from bondholders to convert the benchmark reference for its £350mn (S$650.7mn) floating-rate covered bonds due 2023 to SONIA from GBP LIBOR.
On the risk in the record $535 billion junk bond issuance as borrowing costs fall to new lows
something you have to be more selective on.”