More Issuances from Asian FIs; RHB Bank Priced 5y Senior at T+137.5

30 September 2016

Credit Markets Update

More Issuances from Asian FIs; RHB Bank Priced 5y Senior at T+137.5

¨      APAC USD Credit Market: Asian Credits held steady following OPEC output deal. IG spreads and average HY bond yields were firm at 189.2 and 6.30% respectively, whereas Asian IG CDS plummeted close to 7bps to 111.5bps driven by South-East Asian corporate CDS (Petronas, CapitaLand and SingTel). Benchmark USTs yields were narrowed 1-2bps amid on-going concerns over Deutsche Bank. UST2y edged 2bps lower to 0.73%, while the 10y dipped 1bp to 1.56%. Banking names dominated primary issuances. China Citic Bank International (issue rating: Ba2/NR/NR) sold USD500m AT1 Pnc5 at 4.25% (IPT: 4.625% area). Kasikornbank (Baa1/BBB+/BBB+)’s HK unit, received USD950m orders for its USD400m 5.5y bond priced at T+127.5bps (IPT: +145bps), while RHB Bank (issue rating: A3/BBB+/NR) was oversubscribed by 3.8x for USD500m 5y bond priced at T+137.5bps against IPT at +165bps. Other issues includes, Jubilant Pharma Ltd (NR/BB-/BB-) and TVB Finance (NR), where the former received a low BTC of 1.8x for USD300m 5nc3 bond at 4.875% (IPT: 4.875%), whereas, the latter sold USD500m 5y bonds at 3.625% (IPT: 4.125% area).

¨      SGD Credit Market: Croesus retaps additional SGD50m. There was a keen widening in the short-to-mid SOR benchmark, with the 2y and 5y rising by 7.5-7.7bps to close at 1.44% and 1.76% respectively, even as the USDSGD weakened by 0.38% to 1.364. Brent oil prices rose 1.1% to USD49.2/bbl, with yields of GUOSLP and PREHSP coming in lower (according to Bloomberg). According to Bloomberg, Croesus Retail Trust (NR), a Japanese retail REIT, is planning to retap an additional SGD50m from its SGD60m CROESP 5% 4/20 at 99.5. Looking ahead, Singapore’s 3Q private property prices (2Q: -0.4%) and Sept PMI (Aug: 49.8) will be released on Monday.

¨      MYR Credit Market: Good demand for 20y GII auction. The tender of MYR2.0bn 20y GII 10/35 attracted strong BTC of 2.88x at average yield of 4.226%. Yield for the 20y benchmark continued to inch lower post-auction, which ended the day 3bps firmer at 4.192%. Other benchmarks generally moved sideways with the 10y MGS settling flat at 3.54%. MYR strengthened 0.4% to 4.1245/USD yesterday amid potential coordination among the OPEC members to stabilize oil prices. Strong trading volumes of MYR987m were seen in the corporate market. Notably, Prasarana 3/24, PLUS ’26-36, BGSM 12/20 and TCMH 11/21 closed mostly flattish on combined MYR355m trades. Elsewhere, Public Islamic’s T2 6/24c19 rose 2bps to 4.246%. Over the primary market, UMW (AA2) priced MYR700m across 3y-10y at 4.82%-5.22%, with proceeds likely for debt refinancing purposes.