ICBC Priced New USD Deal, Ascendas Retap SGD; Woolworths Downgraded to BBB

4 May 2016

Credit Markets Update

           

ICBC Priced New USD Deal, Ascendas Retap SGD; Woolworths Downgraded to BBB

¨      APAC USD Credit Market: Asian CDS and IG spreads widened 3.3bps and 1.5bps to 144.2bps and 213.9bps respectively, while HY edged marginally lower by 0.1bps to 7.22%. Meanwhile, the selloff in global equities and the 2% fall in Brent oil to USD44.97/bbl drove yields of Treasuries lower by 4-8bps, with the 5y and 10y at 1.25% and 1.80% respectively. The primary market saw ICBC (A1/A/A), via its Singapore branch, priced a USD800m senior at T3+110bps, or 20bps inside IPT with BTC in excess of 1.75x. Elsewhere, Woolworths suffered a 1-notch downgrade to BBB/Sta by S&P as it continues to lose market share in its core Australian supermarket business while PT Solusi Tunas Pratama’s BB- ratings was placed on negative outlook as the third largest independent Indonesian telco tower operator’s FFO cash interest coverage of 1.6x is not expected to recover to S&P's threshold of 2.0x given the challenging operating environment and high capex.

¨      SGD Credit Market: Ascendas Ptd Ltd retap; Marco Polo issues profit warning. The short-to-mid curve declined by around 2.3-2.5bps, with the 2y and 5y closing at 1.61% and 1.99% respectively. IG property papers tightened by 4-8bps (based on Bloomberg) on names like LMRTSP, KREIT and CREISP subsequent to a new offer by Cambridge Industrial Trust. Marco Polo Marine (NR) announced a potential loss for its 1HFY9/2016 results. Its bond - MPMSP 10/16 traded barely unchanged at c.91.4 even as the issuer facing tight cash of only SGD10.2m vs coming maturity of SGD50m. In the primaries, Ascendas Pte Ltd (NR), which is wholly-owned by Temasek and JTC Corp, a Singapore government agency, tapped the market for the fourth time this year, printing a SGD130m 5y at 2.68%, almost similar to its existing SGD JTCSP 3/21 traded at c.2.67%.

¨      MYR Credit Market: Local govvies ended firmer with the 7y MGS yield falling 2bps to 3.77%, the most active with MYR641m changing hands out of MYR2.1bn transacted on govvies. The MYR2.5bn 15y GII Reopening auction will be the focus this week with the WI last seen quoted at 4.45/25% (tender closing tomorrow, 5-May). Meanwhile, the USDMYR weakened 1.1% to 3.9735 as the hawkish comment from Fed’s Atlanta President Dennis Lockhard sparked the possibility of a June rate hike. Corporate market was muted on MYR209m trades, fueled with government-guaranteed papers – Govco 2/21 fell 6bps to 4.012%; while BPMB 9/21 increased 2bps to 4.018%.