Bond Restructuring Led by O&G Names

6 October 2016

Credit Market Monthly Review

September 2016

Bond Restructuring Led by O&G Names   

Market Review

¨   USD: Investors drawn towards safe-haven assets fuelled by concerns over Deutsche Bank’s difficult situation, reversing earlier losses amid the global bond market sell-off spooked by the shift in global central bank’s monetary policy stance. Asian bond markets waned amid the global bond market sell-off in September.

¨   SGD: MAS expected to keep policy unchanged in Oct. Three O&G names undergo bond restructuring. Weaker property prices as MAS rules out property easing measures for now.

¨   MYR: Lower return of 0.41% in September, YTD return at 7.67%. Thinner liquidity during the month in the govvies market as investors were cautious amid uncertainties of the FOMC, BOJ, and ECB meetings as well as the OPEC informal meeting in Algeria. Corporate market was active.

Demand and Supply Trends

¨   USD: Influx of primary supply in September grew 31% MoM to USD27.9bn (+221% YoY) from USD21.3bn in Aug, although slightly lower than USD28.6bn recorded in July.

¨   SGD: HDB supports primary space, again.

¨   MYR: Maiden issuance from LPPSA.

Rating Trends

¨   Genting Singapore, Vedanta Resources and Tata Motors upgraded; average upgrade/downgrade ratio of 0.50x against 1.58x in August and YTD’s 0.29x.

¨   RAM and MARC downgraded Bahrain Mumtalakat and DRB-Hicom in early-September.

Outlook

¨   Key events in Nov shape uncertainties in the coming month.