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Bond Market Insights - Wed, 28 Sept 2022

Asia HY moves were dominated by CIFI Holdings, the 13th larges builder by contracted sales. Its equity plunged 27% to trade below HK$1. CIFIHG 5 ½ 01/23/23 fell 13pts to 59.00, pulling down the rest of the sector. Country Garden bonds were down around 4pts. COGARD 24 now trades around 43 and the 5.125 27 around 30. It was only on June 22 that Moody’s lowered them below investment grade. The move came after Reorg, a credit intelligence company, reported that CIFI has missed payment on certain nonstandard debt under a Tianjin project company.

Asia IG was for sale this morning, spreads are 5-15bps wider. AT1s are down between 1 and 2pts, DBS 3.3 Perp to 92.00, year to date lows. ETF’s, which have been trading at big discounts to NAV, have been sellers and less-liquid ‘harder-to-find’ paper is finally coming out. There are a few buyers putting cash to work, either covering shorts or adjusting underweight portfolio’s, picking up some of the lower-cash price bonds. Higher-price bonds are very much for sale and trade at an increasingly large discount to their lower priced brethren. Thai AT1s continue to hold up remarkably well, with ongoing retail demand and a lack of real or meaningful selling. Thai oil curves continue to steepen with two-way interest in the bellies and almost entirely selling in the long end. Thai Oil TOPTB 3 ½ 10/17/49 is now trading with a 50 handle.

India IG spreads +10-15bps wider today, continuing the trend of the last few days on low volume. Week on week spreads are about 25-60bps wider while India AT1 have been shunted around 5pts lower.

Softbank has announced that it will spend up to $1.75bn equivalent to buy back bonds. The tender offer will cover a portion of the 2.75bn SOFTBK 6 PERP and its other US$ and EUR denominated bonds.

Onshore yuan weakest vs dollar since 2008 while offshore yuan record lows. PBOC sets yuan fixing at 7.1107 vs consensus 7.1095 and prior 7.0722


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