SG Bonds Weekly – Week 20 May 17, 2021 360

Outlook for the week

We view high yield bonds as more favourable given historically cheap valuations (Figure 3) and higher buffers against rising interest rates.

Key economic releases for the week

  • Mon, 17 May: SG: Non-oil Domestic Exports (8:30AM)
  • Wed, 19 May: Earnings: SINGAPORE AIRLINES – Aft Mkt, SG: GDP (19th – 26th)
  • Thu, 20 May: US: FOMC Meeting Minutes (2:00AM), US: Initial Jobless Claims (8:30PM)
  • Fri, 21 May: US: Markit US PMI (9:45PM)


Last Week Summary

Inflationary fears drove an equity markets selloff last week as the US reported a spike in consumer inflation by 4.2% in April. 10yr US Treasury yields widened to 1.65%. Asia primary debt market activity picked up with high yield issuers picking up the pace, contributing US$6.03bn (or 72.7%) of last week’s total issuance in total. However, high yield issuers had to pay up in terms of new issue premium (NIP) to price deals, paying an average of 7.72bps of NIP to tap the dollar bond market. Real estate issuers were active, pricing 10 deals with an average order book of 4x and an average initial price guidance (IPG) tightening of 33.6bps. The only investment grade issuer within real estate sector this week, Country Garden, tapped its 3.125% 2025 notes at T+230bps and decided against pricing the 10yr tranche after announcing final price guidance at T+250bps.

  • Yanlord Land Group returned to the US dollar bond market with its first USD 500mm green bond offering through Yanlord Land (HK). The deal tightened 37.5bps to price at 5.125%. Total orders were 3.6x covered from 156 accounts, with the majority of orders going to fund managers and insurers (80%). Asian investors took most of the order allocation (92%) while EMEA investors covered the rest. Main proceeds will be used for debt refinancing and for financing green projects. The new bonds performed on the secondary market.4 outstanding mandates remain from the last two weeks.
  • 1 outstanding mandate remain from last two weeks.


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