S&P was up 0.8% and Nasdaq was higher by 0.4% as both indices staged a late rally. US jobless claims for the prior week fell 92k to 498k, the first sub 500k print since the pandemic broke-out. Markets now await the non-farm payrolls (NFP) data today with expectations of a 978k rise. US 10Y Treasury yields were 1bp lower to 1.57%. US IG CDS spreads were 0.2bp wider and HY widened 0.4bp. EU main CDS spreads were 0.7bp wider and crossover spreads widened 2.6bp. Asian equity markets are off to a positive start, up ~0.5% while Asia ex-Japan CDS spreads were 0.6bp wider.
New Bond Issues
- Redco Properties tap of $ 8.0% 2022 sustainability notes at 8.75% area
Powerlong Real Estate raised $200mn via a 5NC3 bond at a yield of 5.1%, 60bp inside initial guidance of 5.7% area. The bonds have expected ratings of B2/B+, and received orders over $3.75bn, 19x issue size. Asia took 87% and EMEA 13%. Asset/fund managers bought 85%, private banks 9%, sovereign wealth funds 3%, and private banks and corporates 3%. The issue size is equal to the property developer’s remaining unused offshore debt quota as per IFR. Proceeds will be used for offshore debt refinancing.
BOC Aviation raised $250mn via a tap of their 1.625% 2024s at a yield of 1.556%, 30bp inside initial guidance of T+155bp area. The bonds have expected ratings of A-/A-, and received orders over $900mn, 3.6x issue size. IFR said, “US investors were allocated 74% of the bonds, an extremely high proportion for an Asian issuer, while Asia investors took 18% and EMEA 8%.” Fund/asset managers and insurance received a combined 87%, sovereigns, supranationals and agencies 7%, bank treasury 5%, and private banks and others 1%. The Chinese aircraft leasing firm plans to use proceeds for new capital expenditure, general corporate purposes and/or the refinancing of its borrowings.
eHi Car Services raised $300mn via a 3.5Y non-call 2.5Y (3.5NC2.5) bond at a yield of 8%, 50bp inside initial guidance of 8.5% area. The bonds have expected ratings of B, and received orders over $1.6bn, 5.3x issue size. The bonds were issued alongside a tender offer for its $400mn 5.875% 2022s at a purchase price of $1,002.5 plus accrued and unpaid interest per $1,000 in principal. The deadline is May 14.
ENN Natural Gas raised $800mn via a 5NC3 bond at a yield of 3.45%, 55bp inside initial guidance of T+320bp area. The bonds have expected ratings of Ba1/BBB-, and received orders over $3bn, 2.7x issue size. Proceeds will be used for debt repayment.
Golden Energy and Resources raised $285mn via a 5NC3 bond at a yield of 8.875%, 12.5bp inside initial guidance of at 9% area. The bonds have expected ratings of B1/B+, and received orders over $360mn, 1.3x issue size. Asia took 88% of the deal and the rest went to EMEA. Asset managers and fund managers bought 55%, private banks 43% and banks 2%. Proceeds will be used to redeem all of the outstanding 2023 notes and repay all amounts outstanding under the Credit Suisse/Mandiri facility, together with any applicable premium as well as accrued and unpaid interest.
KB Kookmin Card raised $300mn via a 5Y sustainability bond at a yield of 1.545%, 35bp inside initial guidance of T+110 area. The bonds have expected ratings of A2, and received orders over $1.6bn, 5.3x issue size. Proceeds will be allocated to eligible green and social projects in accordance with KB Kookmin Card’s green, social and sustainability financing framework.
New Bond Pipeline
- Cathay Pacific hires for $ bond
- GLP $ bond
- JSW Hydro $ bond
- Fitch Upgrades EQT’s IDR to ‘BB+’; Outlook Revised to Stable
- International Business Machines Corp. Ratings Lowered To ‘A-‘ By S&P On Elevated Leverage; Outlook Stable
- EQT Corp. Ratings Placed On CreditWatch PositiveBy S&P Following Announced Acquisition
- Sichuan Languang Outlook Revised To Negative By S&P On Weakening Capital Structure; ‘B+’ Rating Affirmed
- Fitch Revises Outlook on ABM Investama to Stable; Affirms at ‘B+’
- Fitch Affirms Puma Energy at ‘BB-‘; off RWN; Stable Outlook
- Fitch Withdraws Ovintiv Exploration’s Ratings
Term of the Day
Mid-Swaps are essentially the mid-rate or the average of the bid-ask rates on a swap corresponding to the maturity of the bond. Whilst bonds are generally priced as a spread over Treasuries, some issuers price them over the Mid-Swaps rate. Many euro denominated bonds are priced as a spread over the Mid-Swaps rate. The ‘swap rate’ is essentially the fixed-rate that the receiver gets in exchange for paying the floating rate in a Swap contract with the Mid-Swaps being the average of the bid-ask swap rates. Westpac yesterday raised €1bn ($1.21bn) via a Tier 2 bond at Mid-Swaps + 105bp.
the near term to stronger growth in the future,” he said. “After all, this is a restart, not a recovery.”