Broader stock markets ended lower even as the US labor markets strengthened with weekly jobless claims dropping below 400k for the first time since the pandemic started. The ADP May Employment Report revealed stronger than expected new jobs added of 978k. All eyes are now on the Non-Farm Payrolls numbers for May that will be released later today. The S&P was down 0.4% and Nasdaq was down 1.1% with Consumer Discretionary and IT down 1.2% and 0.9% respectively leading the losses. US 10Y Treasury yields were up 4bp to 1.63%. In Europe, FTSE and CAC were down 0.6% and 0.2% respectively while DAX closed higher by 0.2%. Both, US IG CDS and HY CDS spreads widened 0.8bp and 3.6bp. EU main and crossover spreads also widened 0.7bp and 3.22bp respectively. Asian stocks followed the US markets and are mixed – Nikkei is down 0.4% and Shanghai, Hang Seng are up 0.2% each with Asia ex-Japan CDS spreads widening 1bp.
New Bond Issues
- Putian State-owned Assets Investment tap of $ 4.7% 2024s, final at 4.7%
Bombardier raised $1.2bn via a 5Y non-call 2Y (5NC2) bond at a yield of 7.125%, ~25.5bp inside initial guidance of 7.25-7.5% area. The bonds have expected ratings of Caa2/CCC. Proceeds will be used to fund the tender for their 5.75% 2022, 6% 2022, 6.125% 2023 and for general corporate purposes. The cash prices to be paid for the bonds in the tender are $1008.5, $970 and $1032.5 respectively with an early tender payment of $30 each by June 16. There is a tender cap for their 6.125% 2023s at $500mn. Their 5.75% 2022s were up 1 point to 102.98, 6% 2022s up 0.24 to 100.37 and 6.12% 2023s up 0.25 to 105.5.
Mexican cement company Cemex raised $1bn via a Perpetual non-call 5.25Y (PerpNC5.25) bond at a yield of 5.125%, inside initial guidance of mid-high 5% area. The bonds have expected ratings of B. The notes received orders over $3.35bn~3.35 issue size. The perps are callable at par 3-month par call 5Y after issuance. After that, the coupon will reset to the 5Y US Treasury yield+428.4bp and have a coupon step-up of 25bp if not called after 5.25Y. The bonds are callable every six months thereafter. The new perp came after the call announcement of its 4.913% Perp trading at 99.99, yielding 4.88%.
CSC Financial raised $500mn via a 3Y bond at a yield of 1.254%, 47.5bp inside initial guidance of T+140bp area. The bonds were rated Baa1 and received orders over $3.5bn, 7x issue size. CSCIF Asia is the issuer and the Hong Kong and Shanghai-listed parent company is the guarantor. Proceeds will be used for refinancing and general corporate purposes.
Gansu Provincial Highway Aviation Tourism Investment raised $400mn via a 3Y bond at a yield of 3.5%, 30bp inside initial guidance of 3.8% area. The bonds were rated BBB and received orders over $750mn, 1.9x issue size. Proceeds will be used for debt refinancing.
Industrial Bank HK branch raised $600mn via a 3Y green bond at a yield of 0.903%, 37bp inside initial guidance of T+95bp area. The bonds were rated Baa2 and received orders over $3.3bn, 5.5x issue size. Proceeds will be used to finance and/or refinance green assets in renewable energy as well as low carbon and low emission transportation to help achieve China’s carbon neutrality goals. The bonds were issued alongside a HK$2.5bn ($322mn) 3Y green bond at a yield of 0.75%.
Jiangsu Zhongnan Construction raised $150mn via a 364-day note at a yield of 12.25%, 12.5p inside initial guidance of 12.375% area. The bonds have expected ratings of B2/B, and will be issued by Haimen Zhongnan Investment Development (International) and guaranteed by the Shenzhen-listed parent company. Proceeds will be used for offshore debt refinancing.
Chongqing NanAn Urban Construction & Development (CQNA) raised $350mn via a 5Y bond at a yield of 4.7%, 30bp inside initial guidance of 5% area. The bonds have expected ratings of BBB and received orders over $1.1bn, 3.1x issue size. Proceeds will be used for offshore debt refinancing.
Shinsun Holdings raised $200mn via a 364-day sustainable bond at a yield of 11%, 25bp inside initial guidance of 11.25% area. The bonds are unrated and received orders over $850bn, 4.25x issue size. Proceeds will be used for offshore debt refinancing.
New Bond Pipeline
- Shinsun Holdings hires banks for US$ senior bond offering
- Bayfront Infrastructure Capital II hires for $ multi-trancher backed by project finance portfolio
- PayPal Holdings Inc. Ratings Raised To ‘A-‘ By S&P On Business Strength; Outlook Stable
- Fitch Downgrades Serba Dinamik to ‘B-‘ on Rating Watch Negative
- Merck & Co. Inc. Downgraded One Notch To ‘A+’ By S&P On Spin-Off Of Organon & Co.; Outlook Stable
- Peabody Energy Corp. Downgraded To ‘SD’ From ‘CCC+’ By S&P On Distressed Debt-For-Equity Exchange
- Fitch Downgrades Kunming Traffic Investment to ‘BB+’; Outlook Stable
- Republic Of Suriname Local Currency Rating Lowered To ‘SD’ From ‘CC’ By S&P; Foreign Currency ‘SD’ Rating Affirmed
- Fitch Revises AXA Banque’s Outlook to Positive; Affirms at ‘A’