SG Bonds Weekly – Week 32 August 3, 2020 172

Outlook for the week

  • Issuers are taking advantage of the low interest rates to boost cash buffers, with Asian borrowers (particularly China) selling record bond volumes close to USD40bn in July. The Fed extended most of its emergency lending programs to the end of the year, lowering the cost of debt for struggling corporates and further compressing yields for USD bonds, boosting demand for Asian USD yields. Expect our local issuers to follow suit in new bond issues in the coming weeks.

 

Key economic releases for the week

  • Monday, 3 August 2020: US Manufacturing PMI, China PMI, Singapore PMI
  • Wednesday, 5 August 2020: Singapore Retail Sales YoY
  • Friday, 7 August 2020: US Change in Nonfarm Payrolls

 

Past week: Key events

  • Asia bond markets picked up in the week with Chinese real estate developers active in the primary markets, registering USD2.47bn in volume. The sector contributed 25.8% of the week’s total issuance volume.
  • Metro Holdings Ltd responded to SGX queries on its debt repayment abilities. The group has S$145.2mn of Revolving Credit Facilities (RCF) as short-term borrowings and intends to use its S$349.4mn of free cash and unutilized committed/uncommitted RCFs to repay the RCF, while earmarking cash returns from its investment portfolio or divestments to repay the S$150mn bond maturing in October 2021.
  • ARA LOGOS Logistics Trust released its 1H20 results. Occupancy remained stable at 97% with interest coverage at 3.6x and aggregate leverage at 40.4%. The trust’s stable performance is greatly attributed to its large MNC tenant base making up 54.5% of gross rental income.

 

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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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