Bond Market Insights - Tues, 6 Sept 22

The final summer holiday in US limited turnover in Asia credit on Monday, particularly in investment grade, although chipmaker TSMC tightened another 3bp with real money nibbling. China HY property remained weak, Country Garden and CIFI continued to spiral another 3pts, there was also better selling of high cash price names like Greentown and Gemdale. Macau Gaming also continued the downwards trajectory, falling another 1.5pts. Today markets have opened mostly unchanged.


The expected surge of global new issuance for the new quarter kicks off in Asia this morning

Japan:

ORIX Corporation (A-3/A-/A-) two tranches, 5yr and 10yr fixed. IPT T+185 and T+215bps

Sumitomo Mitsui Trust Bank (A1/A) two tranche. 3yr and 5yr fixed. IPT T+150, T+

Korea:

Export Import Bank of Korea (Aa2/AA/AA-), four tranches, 2yr FRN and fixed issues in 2yr, 5yr and 10yr. Fixed IPT at T+80,T+115, T+150 respectively

China:

Zhaohai Investment, guaranteed by Tianjin Binhai New Area Construction & Investment backed by SBLC provided by Bank of Shanghai Tianjin Branch. 3yr bonds with IPT at 5.3%.

The issue is expected to be rated at Baa2, the same as both the guarantor and the SBLC provider.

Ganzhou Urban Investment Holding (BBB-) 3yr sustainable bond, IPT 6.2%. The sustainability structure adviser is China Securities International, with second party opinion coming from CECEP Environmental Consulting Group.

CECEP was established by China Energy Conservation and Environmental Protection Group, directly sponsored and owned by China's central government.

Investor calls and roadshows are being arranged for Suqian Economic Development Group for a US$ REGS bond, and PRC for a CNH denominated issue.

Indonesia: Sovereign is also marketing a three tranche deal in tenors from5yr to 30yrs.


In Europe there is a focus on Italian debt. The 10yr BTP/Bund spread widened by around 35bp since the lows printed in August, bringing us back the highs printed when the Draghi government collapsed in July. Risk is still high, so peripheral markets will continue to underperform