SG Bonds Weekly – Week 40 September 28, 2020 225

  • Asian bond spreads widened significantly mainly on concerns of China Evergrande Group’s bond maturities.
  • Centurion invited holders of its existing S$60 million 5.5% due-2022 notes to exchange them for new 3.5-year notes at a premium and/or to sell them for cash at par.
  • OCBC Bank priced a S$200,000,000 3.00% Perpetual Capital Securities first callable in 2030.

 

Outlook for the week

Key economic releases for the week

  • Wednesday, 30 Sep: US GDP QoQ, US Core PCE QoQ
  • Thursday, 1 Oct: SG URA Private Home Prices QoQ
  • Friday, 2 Oct: SG PMI

 

Last week summary

  • Last week, Asian bond spreads widened significantly mainly on concerns of China Evergrande Group’s bond maturities. The world’s most indebted property developer is slated to repay on Oct. 16 a combined 21.6 billion yuan ($3.2 billion) of principal and interest on a five-year 8% bond and another 7.88% note of the same tenor. Reports of the company warning local government officials of a potential cash crunch that could pose systemic risks caused investors to dump Evergrande’s bonds, sending its yuan note due 2023 down as much as 28% to a record low on Friday, while high-yield dollar debt sank across Asia.
  • On Monday, Centurion invited holders of its existing S$60 million 5.5% due-2022 notes to exchange them for new 3.5-year notes at a premium and/or to sell them for cash at par. The new Singapore dollar-denominated 3.5-year fixed-rate due-2024 notes will carry a 5.75 per cent coupon until April 11, 2023. This rate will increase to 8.25 per cent from April 12, 2023 if any of the new notes are not redeemed by then. Noteholders have until noon on Oct 2 to submit their forms to the agent to make an offer to exchange and/or an offer to sell. Any of the existing S$60 million notes that are not exchanged or purchased by Feb 1, 2021 will be redeemed at par plus interest accrued.
  • On Thursday, OCBC Bank priced a S$200,000,000 3.00% Perpetual Capital Securities first callable in 2030.

 

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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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