The 10yr treasury yield spiked to a high of 1.68% on Wednesday on the back of better than expected jobless claims, before settling down at 1.63%. However, new issue activity in Asia was heavily subdued, with the number of deals printed down 67% WoW. The weekly volume printed also dropped significantly by US$5.78bn to US$2.018bn. With a quiet market, average initial price guidance tightening decreased significantly as well, falling 15.8bps to 18.9bps. US$2.018bn of bonds was issued from 7 deals. Breakdown: Investment Grade: US$1.416bn, High Yield: US$322mn, Non-Rated: US$280mn.
China Local Government Financing Vehicles (LGFV) issuers were active last week with US$780mn issuance volume in total from 4 issuers. Nanning Communications Investment Group made its debut in the dollar bond market issuing US$300mn of 3yr senior unsecured bonds at 3.5%. The deal tightened 40bps from the initial price guidance, one of the most aggressive tightening last week. The issuer is one of the eight major operators of state-owned assets of the Nanning Municipal Government, involved in urban planning and construction.
United Overseas Bank (UOB) raised EUR750mn through a covered bond deal, Singapore’s first covered bond for the year 2021. The deal tightened 2bps from IPG to price at mid swap+10bps, yielding 0.124% with a coupon of 0.1%. Majority of allocations were out of Asia, with banks taking up 37% and central banks 33% of total allocations. UOB has been an active issuer in the covered bond market, being the first in Singapore to issue EUR covered bonds in 2016.
5 outstanding mandates remain from last two weeks.
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