US Markets continued to hover close to record-highs with the S&P slightly lower by 0.1% while Nasdaq was up 0.1% at an all-time high. Consumer Discretionary was up 0.6% while Financials and Energy were up 0.3%, providing support to the indices that were weighed down by other sectors. Preliminary Markit Purchasing Managers’ Index (PMI) US manufacturing rose to 62.6 this month vs. estimates of 61.5. US 10Y Treasury yields were 3bp higher at 1.49%. European markets reversed the gains and closed lower – DAX, CAC and FTSE were down 1.2%, 0.9% and 0.2% respectively. US IG and HY CDS spreads tightened 0.3bp and 0.8bp respectively. EU main and crossover CDS tightened 0.8bp and 4.8bp respectively. Saudi TASI was largely flat while Abu Dhabi’s ADX was down 0.1%. Brazil’s Bovespa closed 0.3% down. Asian markets opened cautiously – HSI and Singapore’s STI up 0.2%, Shanghai up 0.1%, Nikkei broadly flat. Asia ex-Japan CDS spreads were 0.5bp tighter.
New Bond Issues
- Shui On Land $ 5NC4 sustainability-linked bond at 5.75% area
- Shenzhen Expressway capped $300mn 5Y at T+150bp area
- Goho Asset Management $ 2Y bond at 8.5% area
NatWest raised $750mn via a Perpetual non-call 10.5Y (PerpNC10.5) AT1 bond at a yield of 4.6%, 52.5bp inside initial guidance of 5.125% area. The bonds have expected ratings of Ba2/B+/BBB-. The first call date is June 28, 2031 and the coupons are fixed until the first reset date of December 28, 2031. If not called by the first reset date, the coupon re-fixes on each reset date to the 5Y US Treasury yield + initial margin of 310bp. The trigger event would occur at any point in time when the fully loaded CET1 Ratio of the Group is less than 7%. NatWest’s CET1 ratio as of 1Q2021 stood at 18.2%. Proceeds will be used for general corporate purposes and to strengthen further the capital base or the capital base of subsidiaries and/or the Group.
Kuwait Finance House raised $750mn via a PerpNC5.5Y AT1 Sukuk at a yield of 3.6%, 40bp inside initial guidance of 4% area. The bonds are unrated. The issuer is KFH Tier 1 Sukuk Ltd and the obligor is Kuwait Finance House KSCP and is rated A2/A+. The first call date is June 30, 2026 and the first reset date is December 30, 2026 and every five years thereafter. If not called by the first reset date, the coupon resets to the 5Y Treasury yield + margin of 262.9bp.
BNP Paribas raised $1bn via a 6Y non-call 5Y (6NC5) green bond at a yield of 1.675%, 25bp inside initial guidance of T+105bp area. The bonds have expected ratings of Baa1/A-. Proceeds will be used from time to time to the financing and/or refinancing, in whole or in part, of Eligible Green Assets as defined and further described in the BNP Paribas Green Bond Framework dated Sep 2020.
Banco Santander raised $1.5bn via a 3NC2 bond at a yield of 0.701%, 20bp inside initial guidance of T+65bp area. The bonds have expected ratings of A2/A/A. Proceeds will be used for general corporate purposes.
Turk Eximbank raised $750mn via a 5Y bond at a yield of 5.875%, a strong 62.5bp inside initial guidance of 6.5% area. The bonds have expected ratings of B2/B+. Proceeds will be used for general corporate purposes.
CK Asset raised $600mn via a two-trancher. It raised $250mn via a 3Y bond at a yield of 0.841%, 30bp inside initial guidance of T+70bp area. It also raised $350mn via a 5Y bond at a yield of 1.405%, 30bp inside initial guidance of T+85bp area. The bonds have expected ratings of A2/A. CK Property Finance will issue the senior unsecured bonds with a guarantee from parent CK Asset.
China Oil and Gas Group raised $400mn via a 5Y non-call 3Y (5NC3) bond at a yield of 4.7%, 45bp inside initial guidance of 5.15% area. The bonds have expected ratings of Ba2/BB and received orders over $2.65bn, over 6x issue size. Asia bought 88% of the bonds, EMEA 10% and others 2%. Fund managers were allocated 89%, insurers/pension funds/sovereign wealth funds 5%, private banks and corporates 3%, and banks 3%. Proceeds will be used to repay debt, including their $350m 4.625% 2022s, and for general corporate purposes.
Leading Holdings Group raised $150mn via a 364-day note at a yield of 12.5%. The bonds are unrated. Proceeds will be used for general corporate purposes.
Fosun International raised €500mn ($596mn) via a 5.25Y bond at a yield of 4%, 25bp inside initial guidance of 4.25% area. The bonds are rated Ba3/BB and received orders over €1.05bn, 2.1x issue size.
Beijing Construction Engineering Group (BCEG) raised $600mn via a 5Y bond at a yield of 2.22%, 45bp inside the initial guidance of T+180bp area. BCEG (HongKong) is the issuer with BCEG as the guarantor. The bonds have an expected rating of BBB and received orders of over $4.6bn, 7.7x the issue size. Proceeds will be used for offshore debt refinancing.
New Bond Pipeline
- Zhongyuan Yuzi Investment hires for $ bond issue; calls today
- LG Chem plans $ green 5Y and/or 10Y Yankee
- Mongolia hires for $ senior bond; calls starting today
Mirae Asset Securities hires for $ green bond; calls starting today
- Laos plans $ bond offering; to repay 2021s
- Sumitomo plans for $ 5Y issuance