US initial jobless claims came at 375k for the prior week, in-line with expectations and better than 387k the week before. European industrial production was reported at negative -0.3% for June, lower than the expectations of -0.2% and vs. previous month’s -1.1%. UK’s industrial production printed at -0.7% MoM in June vs. 0.6% in the previous month. India’s CPI (YoY) posted 5.59%, marginally lower than expectations of 5.78% while industrial production was slightly higher than expectations at 13.6%.
BondEvalue has been named in the ‘Forbes Asia 100 to Watch’ list for making bonds more widely accessible to individual investors with the BondbloX Bond Exchange, the world’s first fractional bond exchange that allows trading in minimum denominations of $1,000.
New Bond Issues
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Chongqing International Logistics Hub Park Construction $ 3Y at 5.75% area
Shaoxing City Investment Group raised $700mn via a 5Y bond at a yield of 2.5%, 60bp inside initial guidance of 3.1% area. The bonds are rated BBB+ and received orders over $4bn, 5.7x issue size. Proceeds will be used for offshore refinancing, onshore project construction and working capital. Shaoxing City Investment Group is fully owned by the Shaoxing SASAC in Zhejiang province with its businesses in natural gas and bottled liquefied gas sales, water, and infrastructure construction and operation.
Shinsun Holdings Group raised $200mn via a 2Y sustainable bond at a yield of 12.5%, 25bp inside initial guidance of 12.75% area. The bonds have expected ratings of B3/B- and received orders over $425mn, 2.1x issue size. Proceeds will be used for offshore debt refinancing.
New Bonds Pipeline
- Perusahaan Pengelola Asset hires for $ bond
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PCGI Holdings hires for $ 5NC3 bond; calls today
- HDFC Bank hires for $ AT1 Bond
Rating Changes
- Fitch Downgrades Oglethorpe Power Corp to ‘BBB’ and ‘F2’; Outlook Revised to Stable
- DirecTV Holdings LLC Legacy Unsecured Debt Rating Lowered To ‘B’ By S&P Following Spin-Off From AT&T
- Fitch Revises Tenet Healthcare’s Rating Outlook to Positive; Affirms ‘B’ IDR
- Fitch Withdraws Marble II’s Ratings
Term of the Day
Fiscal Balance
Fiscal balance is the difference between a government’s total revenue (total taxes and non-debt capital receipts) and its total expenditure. A fiscal deficit is when the government’s expenditure exceeds its income and a surplus is when the income exceeds expenditure. Fiscal balances are typically stated as a percentage of the economy’s GDP. A deficit or gap is generally filled by borrowing from the central bank of the country or by raising money from capital markets through debt instruments. A recurring high fiscal deficit implies that the government is spending beyond its means and could lead to a default in an extreme case.
Qatar reported a $1.04bn surplus in 2Q2021 helped by higher than budgeted oil prices. Qatar, a major LNG producer, earned QAR 50.1bn ($13.8bn) in revenue vs. QAR 46.2bn ($12.7bn) in expenditure during the quarter.
Talking Heads
“While recognising that special factors account for much of the current spike in inflation, the expectation of continued strong demand, a recovering labour market and firm inflation expectations are consistent, in my view, with the committee’s guidance regarding substantial further progress toward its objectives.” “I support bringing asset purchases to an end under these conditions.”
On Mexico central bank raising interest rates to 4.5% in ‘dovish’ hike
In a statement by Bank of Mexico
“Investors’ focus when choosing whether to buy an Asian ESG bond is still driven by the credit profile of the issuer and the bond pricing, rather than the ESG credentials of a specific bond issue.” “This might be because ESG investing is still at a relatively early stage in Asia.”
