Missed the Bond Traders’ Masterclass sessions this week? Join us for the upcoming sessions at 6pm SG/HK from the 31st of March starting with Bond Portfolio Optimization & Risk in Perpetual Bonds.
New Bond Issues
- Maldives 5Y Sukuk at 10.5% area
- Nickel Mines $ 3NC2 at 6.75% area
- KNOC $ 5Y/10Y T+80bp/T+100bp areas
- Jiangsu Zhongnan Construction $ 3NC2NP2 at 11.625% area; alongside exchange offer
CAR Inc raised $250mn via a 3Y non-call 2Y (3NC2) senior bond at a yield of 10%, 25bp inside initial price guidance of 10.25% area. The bonds have expected ratings of Caa1/B- and received orders over $445mn, 1.8x issue size. S&P, which rates CAR at CCC+ said it could upgrade the issuer rating to B- if the issue is successful. Proceeds will be used to repay debt and for general corporate purposes.
Nomura cancelled a $3.25bn bond issuance on account of a potential loss of ~$2bn in its US subsidiary with a US client. The Japanese lender said that it would consider issuing the bond once the financial results of this are known.
New Bond Pipeline
- Jardine Matheson $ bond
- Huatai Securities $ bond
- Chengdu Jiaozi $ bond
- ReNew Power $ 7.25Y green Yankee
- Wuxi Industry Development $ bond
- Resorts World Las Vegas $ bond
- AIA Group $ PerpNC5
- IRFC $ 5Y bond
- Tunas Baru Lampung $ bond
- Pakistan sovereign bond
- Moody’s changes outlook for Beazer to positive from stable
- Moody’s changes BMW’s outlook to stable, affirms A2 ratings
- Moody’s changes Volkswagen’s outlook to stable, affirms A3 ratings
- Moody’s changes Daimler’s outlook to stable, affirms A3 ratings
- Moody’s changes outlook of Hyundai Capital Services to stable; affirms ratings
- Moody’s changes outlooks of Hyundai Motor, Kia Motors and Hyundai Mobis to stable from negative; affirms Baa1 ratings
- Avation PLC Downgraded To ‘SD’ On Completion Of Bond Restructuring; Issue Rating Lowered To ‘D’
- Fitch Downgrades Avation to ‘RD’ on Debt Exchange; Then Upgrades to ‘CCC’, On Watch Negative
- Moody’s changes Yinchuan Tonglian’s outlook to negative; affirms ratings
- Moody’s withdraws Dr. Peng’s ratings due to insufficient information
- DaFa Properties Group Ratings Withdrawn By S&P At The Company’s Request
The Week That Was
US primary market issuances rose to $41.8bn, up 27% vs. $33.1bn the week prior. The rise in issuance can be attributed mainly to IG deals at $28.1bn, up 38% WoW while HY fell 17% WoW to $10.5bn. The largest deal in the IG space was Oracle’s $15bn six-part issuance and in the HY space, cruise operator Royal Caribbean and NFE led the tables with a $1.5bn issue each. In North America, there were a total of 49 upgrades and 41 downgrades combined, across the three major rating agencies last week. LatAm saw $1.9bn of deals last week vs. a mere $178mn in the week prior led by Banco de Credito Peru raising $500mn and Trust Fibra Uno raising $300mn. EU Corporate G3 issuance saw an increase again last week to $41.2bn vs $32.3bn in the week prior – ING’s €5bn ($5.9bn) deal was the largest, followed by UBS’s combined $3.7bn dual currency offering (EUR and GBP) in three parts and Santander’s $2.25bn dual-trancher. GCC and Sukuk G3 issuances were at $1bn with Kuwait’s Boubyan bank and Doha Finance raising $500mn each in the week prior. APAC ex-Japan G3 issuances were relatively lower at $6.2bn vs $7.7bn in the prior week. Greenko’s $940mn was the largest deal – it was also the largest ESG deal yet from India. Other large deals were MGM’s $750mn 5.8NC2.8 bond and GLP China’s $700mn 5Y. In the Asia ex-Japan region, there were 6 upgrades and 6 downgrades combined, across the three major rating agencies last week.
Term of the Day
Tobin’s Q aka Q-Ratio is calculated as the market value of the company divided by the replacement cost of its assets. Since replacement costs are difficult to calculate, a commonly used metric is the book value of assets or adjusted networth of the company. The ratio was made by Nobel laureate James Tobin, who suggested that the combined market value of all companies on the stock market should be about equal to their replacement costs. A ratio of less than 1 would indicate asset book values exceeding their market value, thus making the company undervalued. Bloomberg in a story noted that the ratio is currently at its highest since 2000.
On bubble deniers abound to dismiss valuation metrics one by one