Cbonds Global

2022-06-23 19:06:12 Upcoming issue

Issuer: United Arab Emirates

Issue description: 10 and 30 years benchmarks

Date: soon

Bookrunners and Lead Managers: Abu Dhabi Commercial Bank, Bank of America Securities, Citi, Emirates NBD Capital, First Abu Dhabi Bank, HSBC, JP Morgan, Mashreqbank and Standard Chartered Bank Open / Comment

2022-06-23 18:59:00 Upcoming issue

Issuer: Agence Française de Développement

Issue description: June 2024 dollar benchmark

Date: soon

Bookrunners and Lead Managers: BNP Paribas, Daiwa, Deutsche Bank and Morgan Stanley Open / Comment

2022-06-23 18:58:00 Upcoming issue

Issuer: KfW

Issue description: benchmark June 2025

Date: soon

Bookrunners and Lead Managers: Citi, Morgan Stanley and Nomura Open / Comment

2022-06-23 16:15:49 Largest EM issues of June 21-23

Issue | Volume

China
Asian Infrastructure Investment Bank (AIIB)(Aaa/AAA/AAA), 3.375% 29jun2025, USD 1,25 bn
Initial issue price (yield): 99.686% (3.49%)
Spread to US Treasury bonds: 30.08 bp
Spread to mid-swaps: 38 bp
Listing: London S.E.

BOND SEARCH Open / Comment

2022-06-23 12:43:59 The announcement of the anti-spread measures issued by the ECB benefited the BTP-Bund spread

The announcement of the anti-spread measures issued last week by the ECB benefited the BTP-Bund spread at the beginning of the week. At that time, in fact, the spread was close to 200 points, down from the peak reached last week (237 basis points).

However, the situation remains tense for the Italian economy which will probably have to face a recession. Like many Western economies that are recovering from the pandemic and are now facing disruptions caused by the conflict in Ukraine, the country faces high inflation (price hikes were 6.8% in May) and a recession always seems more obvious. The markets identify Italy among the countries most at risk as it has always had a very high Debt / GDP ratio (151%) and today, normalizing interest rates and easing Quantitative Easing to avoid inflation could prove fatal. Furthermore, Italian banks, unlike German ones, are much more exposed to the Russian market and this could have long-term consequences.

However, according to the Financial Times, the situation is very different compared to the crisis of 2011. First, Italian banks have much stronger capital buffers than in the last decade and boast a much higher profitability. The country's leadership itself is much more credible on European markets and guarantees a large slice of stability compared to 10 years ago.

Furthermore, Myles Bradshow, Head of Global Aggregate Fixed Income Strategies of JP Morgan Asset management told IlSole24ore: “Today the Italian banking system is much stronger - he observes -. Precisely the crises of the past years have forced credit institutions to strengthen their assets, so today they are strong enough to support an increase in the spread. This means that the rise in the BTp-Bund differential will have less impact on the real economy than in the past".

He also states that the average life of the Italian public debt is very long (about 7 years) and therefore it will take time before the increase in rates can have a significant impact. Italy can also count on the PNRR plan, with EU funds to stimulate investments, reforms, growth and therefore less need for debt. Finally, both Bradshow and the Financial Times agree that the reasons for this increase in the spread are not attributable to Italy but to general reasons related to inflation and the situation in Ukraine.

The ECB, for its part, has reassured the markets by stating that even if an anti-spread shield is not foreseen for the moment, this could be implemented in the future to calm the markets. Open / Comment

2022-06-23 10:01:31 US Treasury Securities

Yield Curve

UST 2Y YTM:
3.06% ( 15 bp)
UST 5Y YTM:
3.22% ( 16 bp)
UST 10Y YTM:
3.16% ( 15 bp)
UST 30Y YTM:
3.25% ( 14 bp)

U.S. Treasuries ended Wednesday with solid gains across the curve, reclaiming their losses from Tuesday. The Fed chairman said that it is appropriate to raise rates to a moderately restrictive level and that achieving a soft landing will be "very challenging".

Comment: Briefing Open / Comment

2022-06-22 17:52:14 Largest EM issues of June 17-22

Issue | Volume

China
Fujian Jinjiang Urban Construction Investment Development Group, 4.5% 23jun2023, USD 142 mln
Initial issue price (yield): 100% (4.50%)
The purpose of placing: Working Capital, Project Finance, Refinance
Listing: Hong Kong S.E.

China Development Bank(A1/A+/A+), FRN 30jun2025, EUR 100 mln
Initial issue price (yield): 100%

Hong Kong
Linyi City Development Group, 5.2% 24jun2025, USD 300 mln
Initial issue price (yield): 100% (5.20%)
The purpose of placing: Capital Expendiures, Project Finance
Listing: Hong Kong S.E.
Bookrunner: Agricultural Bank of China, CITIC Securities International, CLSA, CNCB Capital, Central Wealth Securities Investment, China Galaxy International Securities, China Industrial Securities International Financial Group, China International Capital Corporation (CICC), China Minsheng Banking, China Securities (International) Finance, Guotai Junan Securities, Guoyuan Securities, Haitong International Securities Group, Huatai Securities, Industrial Bank, Shanghai Pudong Development Bank, Shenwan Hongyuan Group, Sigma Capital Management, Sinolink Securities
Depository: Clearstream Banking S.A., Euroclear Bank

BOND SEARCH Open / Comment

2022-06-22 15:55:28 Upcoming issue

Issuer: Jab Holding

Issue description: €500m no-grow 10 year bond

Date: soon

Bookrunners and Lead Managers: BNP Paribas,Credit Agricole, HSBC, ING, MUFG, Santander, SEB and SMBC Nikko Open / Comment

2022-06-22 14:27:43 Upcoming issue

Issuer: Permanent TSB

Issue description: three year non-call two preferred deal

Date: soon

Bookrunners and Lead Managers: Bank of America, Citi, Goldman Sachs and Morgan Stanley Open / Comment

2022-06-22 14:24:16 Upcoming issue

Issuer: Unicaja

Issue description: debut senior green bond

Date: soon

Bookrunners and Lead Managers: BBVA is a green structuring advisor and lead manager alongside joint leads Bank of America, Credit Suisse and Natixis Open / Comment