SG Bonds Weekly Week 12 March 22, 2021 547

Outlook for the week

Key economic releases for the week

  • Tue 23 Mar: SG: CPI Core YoY (1:00PM)
  • Wed, 24 Mar: US: Markit US Manufacturing PMI (9:45PM)
  • Thu, 25 Mar: US: GDP Annualized QoQ (8:30PM), US: Core PCE QoQ (8:30PM),
  • Fri, 26 Mar: SG: Industrial Production YoY (1:00PM)

Last Week Summary

The Federal Reserve’s dovish stance on monetary policy did not convince the market. The Treasury yields continue soaring and equity markets remain volatile. The 10Y and 30Y treasury yields both hit respective highs of 1.71% and 2.45% as future inflation fears perpetuate the treasury bond sell off. US$5.01bn of bonds was issued from 16 deals. Breakdown: Investment Grade: US$2.5bn, High Yield: US$2.4bn, Non-Rated: US$110mn.

  • The issuance in Asia primary bond market rebounded this week as Investment Grade (IG) issuers led the new issue market. Market appetite for China IG issuers was significantly higher this week with average book coverage surging to 10.2x and average Initial Price Guidance (IPG) Tightening increasing 9.6bps to 45bps.
  • Singapore’s Clifford Capital returned to the offshore market to issue a US$500mn 5Y senior bond guaranteed by the Singapore government. The AAA-rated bond was priced at T+30bps, at the lower end of the initial price guidance range of T+30-35bps. Final orderbook exceeded US$1bn and Public Sector took up 58% of the final allocations. The company provides debt financing for infrastructure and maritime projects in Singapore and is backed by Temasek.
  • PT Japfa Comfeed, Indonesia’s second-largest poultry company, printed a US$350mn 5.375% 5NC3 sustainability-linked bond priced to yield 5.5%. The bonds were mostly placed to European investors(57%) and final order books were 3.3x covered. If Japfa fails to satisfy its sustainability performance target, there will be a sustainability-linked one-time 25bps coupon step-up. Despite having been priced with the lowest New Issue Premium this week(-38.2bps), the bonds continue to perform on the break trading more than 2 points above reoffer.

3 outstanding mandates were announced during the last two weeks.

 

 

 

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About the author

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Timothy Ang
Research Analyst
Phillip Securities Research

Timothy covers credit analysis of local and foreign bonds. Previously an equity dealer, he handled equity trade execution and portfolio management. He has presented seminars for organisations such as SIAS, SPH and IRAS, commentated live market updates for 93.8FM, and authored investment articles for the Business Times newspaper. He graduated with a Bachelor of Commerce in Accounting & Finance from the University of Western Australia.

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