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US equity markets saw a massive sell-off on Wednesday with the S&P down 4% and Nasdaq down 4.7%. Sectoral losses were led by Consumer Staples and Consumer Discretionary, down over 6% each. US 10Y Treasury yields fell 6bp to 2.91% on the overall risk-off sentiment that took hold of markets. European markets were lower too with the DAX, CAC and FTSE down 1.3%, 1.2% and 1.1%. Brazil’s Bovespa closed 2.3% lower. In the Middle East, UAE’s ADX was up 1.4% while Saudi TASI rose 0.2%. Asian markets have opened lower – Shanghai, HSI, STI and Nikkei were up 0.1%, 2.3%, 0.3% and 2.1% respectively. US IG CDS spreads widened 6.6bp and HY spreads widened 34.8bp. EU Main CDS spreads were 4.8bp wider and Crossover spreads were 26.2bp wider. Asia ex-Japan CDS spreads were 0.6bp wider.
UK’s inflation jumped to a 40Y high of 9% YoY in April, with food prices jumping 12%.
Trade BondbloX via Singapore-based member CapBridge and Receive Cash Credits.
The Class A-1 notes are rated A+/A+ (S&P/Fitch), while the Class A-2 notes are rated A by Fitch and the Class B notes at BBB+ by Fitch. The bonds have a 100bp step-up if the call is not exercised. The Class A-1 notes are split between a S$246mn institutional placement and a S$280mn retail tranche. The Class B note is split into a $100mn retail offer to Singapore-based investors and a $100mn institutional placement to Singapore-based and international investors.
Carnival Corp raised $1bn via an 8NC3 bond at a yield of 10.5%, ~27.5bp inside initial guidance of 10.25-10.5% area. The bonds are rated B2/B. Proceeds will go towards making scheduled principal payments on debt maturing in 2023 and for general corporate purposes.
Westpac raised $2.25bn via a three-trancher. It raised:
The bonds received orders over $3.225bn, 1.43x issue size.
Wing Tai Holdings raised S$100mn via a 5Y bond at a yield of 4.1%, 35bp inside initial guidance of 4.45% area. The bonds are unrated and received orders over S$300mn, 3x issue size. Fund managers and insurance companies bought 43% while private bank took 57%. Singapore accounted for 99% of the deal with others at 1%. Private banks have a 25-cent concession.
Shandong Gold raised $100mn via a PerpNC3 bond at a yield of 4.95%, 20bp inside initial guidance of 5.5% area. SDG Finance, an indirect wholly owned subsidiary, is the issuer, and the parent is the guarantor. The bonds have a 300bp step-up if not called after three years. The step-up will also take place if there is a change of control, covenant breach, default or dividend stopper breach. Proceeds will be used for refinancing and general corporate purposes.
Bridge financing is a temporary form of financing used to cover the borrower’s short-term costs until the moment when regular long-term financing is secured. This form of financing ‘bridges’ the gap between when the borrower’s funds are set to dry up and its next long-term funding option..
On Crisis-hit Sri Lanka braces for debt default as dollars run out
Manjuka Fernandopulle, a Debt restructuring lawyer
“We defaulted with an idea that we would have a restructuring process starting… And that seems not to be moving anywhere . . . The cabinet is not there. The urgency of starting a restructuring process has fallen to the background.”
Ranil Wickremesinghe, Sri Lankan PM
“It is a challenge for the Treasury to find $1mn. The next couple of months will be the most difficult of our lives. We must prepare ourselves to make sacrifices.”
On ECB Needs to Move Quickly From Negative Rates – Bank of Finland Governor Olli Rehn
“It seems necessary that in our policy rates we move relatively quickly out of negative territory and continue our gradual process of monetary-policy normalization… I am not alone, as this is also the indication given by many of my colleagues in the ECB Board and Governing Council.”
On India’s Monetary Panel Sees Need for More Interest Rate Hikes
RBI Governor Shaktikanta Das
“Waiting for one month till the June MPC would mean losing that much time while war related inflationary pressures accentuated.” Further, it may necessitate a much stronger action in the June MPC which is avoidable
External member Jayanth Rama Varma
“It appears to me that more than 100 basis points of rate increases needs to be carried out very soon”
Michael Patra, deputy governor at RBI
“Geopolitical spillovers have thrust upon us a surge in the momentum of inflation we can ill afford. As long as the geopolitical crisis and retaliatory actions persist, so will inflation”