US consumer confidence dropped for a third consecutive month to a seven month low of 109.3 in September from 115.2 in August and lower than economist expectations of 115. Bloomberg suggests that concerns over the delta variant and higher prices dampened sentiment. Besides, the Richmond Fed Manufacturing Index also came lower at -3 vs. 9 in the previous month, the first negative reading since June 2020 at the peak of the pandemic.
Bond Portfolio Optimization & Discussion on Leverage | Today at 5pm SGT
Last call for today’s masterclass on Bond Portfolio Optimization & Discussion on Leverage, designed and curated for bond investors and professionals to learn about how to construct bond portfolios and the impact of leverage in different scenarios. The course will be conducted live via Zoom by senior debt capital market bankers. Click on the image below for more details..
Attendees on a trial plan will receive a 1-month complimentary Premium subscription to the BondEvalue App and attendees with a current subscription will receive a 1-month free one-tier plan upgrade. All attendees will also receive a certificate, presentations materials and 14-days access to video recordings to re-watch the sessions.
New Bond Issues
- Sembcorp Industries S$ 10.5Y sustainability-linked bond at 2.66% final
- NH Investment & Securities $ 5Y at T+125bp area
- Ganzhou Urban Investment Holding Group $ 3Y at 3.5% area
- Chengdu Yang An New Town Development $ 3Y at 1.9% final
Chengdu Xingcheng Investment raised $300mn via a 5Y green bond at a yield of 2.375%, 37.5bp inside initial guidance of 2.75% area. The bonds have expected ratings of BBB+ (Fitch), and received orders over $1.75bn, 5.8x issue size. Proceeds will be used for offshore refinancing to support certain eligible green projects. The issuer is wholly owned by the Chengdu SASAC. It has businesses including urban infrastructure construction and municipal development, property development, pharmaceuticals and healthcare. The new bonds are priced 35.5bp tighter to its existing 2.9% non-green 2026s that yield 2.73%.
NBN raised $2bn via a three-tranche deal. It raised:
- $600mn via a 3Y bond at a yield of 0.978%, 22bp inside initial guidance of T+65bp area.
- $700mn via a 5.25Y bond at a yield of 1.703%, 17.5bp inside initial guidance of T+87.5bp area.
- $700mn via a 10.25Y bond at a yield of 2.534%, 20bp inside initial guidance of T+120bp area.
New Bonds Pipeline
- Saigon-Hanoi Bank hires for $ bond
- Burgan Bank hires for $ 500mn 6NC5 bond
- Kexim hires for $/€ bond
- Clover Aviation Capital hires for $ bond
- Apicorp hires for $ 5Y green bond
- Dat Xanh Group hires for $ debut bond
- Helenbergh China hires for $ 270 mn 2Y green bond
- GD-HKGBA Holdings hires for $ 2Y bond
- Outlook On Pharmaceutical Company UniFin (Unither) Revised To Neg As COVID-19 Affects Sales; ‘B’ Rating Affirmed
- Moody’s upgrades Petrobras rating to Ba1; stable outlook
- Fitch Upgrades Mizuho’s VR to ‘a-‘; Affirms IDRs at ‘A-‘; Outlook Stable
Term of the Day
A private placement is a sale of securities directly to select private investors, rather than issuing them via a public offering. Investors in privately placed bonds generally comprise large banks, mutual funds, or insurance companies. The advantage of private placements is that they may not be subject to the same strict regulations regarding disclosure and reporting of public offerings. Also, the cost and time savings add to its attractiveness. On the other hand, they may carry a higher rate to entice investors and they limit the number and variety of investors that can take part unlike public offerings.
On Wall Street banks questioned by Fed on Evergrande exposure – Jerome Powell, Federal Reserve Chairman
Powell’s main worry was “that it would affect global financial conditions through confidence channels and that kind of thing.”
On rates ‘waking up’ to global hiking cycle – Jim Reid, strategist at Deutsche Bank
“This is an incredibly delicate and difficult period for central banks.” “As a minimum, rates markets are finally waking up to the asymmetric risk/reward that had developed over the summer months given all the global inflation in the system and the evidence that we were in a global hiking cycle.”
On Loomis Sayles teaming up with State Street for rare ETF foray – Sue Thompson, head of SPDR Americas Distribution at State Street Global Advisors
“The low interest-rate environment is driving demand for non-traditional fixed income investments.” “OBND seeks to meet investors’ needs for both yield and diversification while providing the benefits of active risk management.”
On European high yield bond trading stagnating following Evergrande’s fallout – Jochen Felsenheimer, managing director at XAIA Investment
“The CDS market looks much more like a market should look like,” Felsenheimer said. “Bond markets rather look like a supermarket after Brexit.”
On China’s power crunch dwarfing Evergrande’s troubles in investors’ eyes – Yuan Yuwei, hedge fund manager at Water Wisdom Asset Management
“The Evergrande crisis has been unfolding for quite some time, and I think the risks will be defused in a targeted way.” “The fallout [from power supply squeeze] is more likely to be out of control,” Yuan said.
On the caution not to write off China as potential Evergrande collapse will be ‘manageable’ – Hou Wey Fook, DBS chief investment officer
Top Gainers & Losers – 29-Sep-21*