Cbonds Global

2022-01-21 17:17:11 #CbondsAnalytics

Effective Commodity Tracker – Cbonds Data Indices

In December 2021, the US CPI rose 7.0%, while the figure was 5.0% in the Eurozone. These readings are a multi-year high. China's CPI came in at 1.5% for December 2021, while Japan's number was 0.6% for November 2021. In the US, GDP grew by 2.1% in the third quarter, Eurozone GDP grew 3.7%, while Japan's contracted by 3.6% over the year. GDP growth was 4.0% in China during the 4th quarter.
Inflation returned in 2020-21 in a non-transient nature in most world economies, which increased commodity prices across multiple segments, including many industrial and agri-commodities due to Covid-19 restrictions and disruptions.
This report, the 18th in the series, will cover the Baltic Dry index, as displayed on the Cbonds platform. One can find index prices effectively in the Cbonds Indices section.
The Baltic Dry Index (BDI) is a composite of the dry bulk time-charter averages that constitutes 40% of Baltic Capesize Index, 30% of the Baltic Panamax Index and the remaining 30% by Baltic Supramax Index. The Baltic Exchange in London created BDI.
BDI tracks the average freight price to ship raw materials. The Baltic Dry Index is affected by the number of ships available for transport. Typically, the number of ships cannot be easily manipulated or disrupted; as ships usually take years to build and once built, it is expensive to keep them inactive.
BDI movements have the potential to influence the commodities market as it transports items such as coal, steel, iron ore, corn, and wheat by sea.
The Baltic Dry Index is also affected by the commodity demand from consumers who need raw materials for production. Producers buy commodities when they begin work on heavy machinery, roads, large infrastructure projects and other finished goods. Producers skip buying raw materials when they pause work on infrastructure projects or have a huge pile-up of unused inventory.
The movement of BDI is based on two factors; the demand for shipping and the supply of vessels.
Over the last year, the BDI Index has declined 5.51%, to 1644, as of January 2022. The index peaked 3.24 times in October 2021, to 5,650. Over the last 3-months index tanked 71%.
Supply chain disruptions during the covid-19 pandemic weighed on BDI movements; in the last 3-months, as vessel demand receded, the index fell sharply.
BDI is also seen as an indicator of global economic activity and can be treated as a leading economic indicator.
In the last 10-years, the BDI index touched the lowest level of 290 in February 2016, driven by slower global GDP growth and also plunged to 393 level in March 2020 driven by Covid-19 disruptions.

Read the full report here Open / Comment

2022-01-21 16:27:01 Largest EM issues of Januarу 19-21

Issue | Volume

China
Country Garden Holdings (Baa3/BB+/BBB-), 4.95% 28jul2026, HKD (Conv.) 3,9 billions
Initial issue price (yield): 100% (4.95%)
Listing: SGX

Henan Railway Investment (A2/-/-), 2.2% 26jan2025, USD 400 mln
Initial issue price (yield): 100% (2.20%)
The purpose of placing: Working Capital, Refinance
Listing: Hong Kong S.E.
Bookrunner: Agricultural Bank of China, Bank of Communications, CITIC Securities International, CLSA, CNCB Capital, China Everbright Bank, China Industrial Securities International Financial Group, China International Capital Corporation (CICC), China Merchants Bank, China Minsheng Banking, China Securities (International) Finance, China Zheshang Bank, DBS Bank, Guotai Junan Securities, HSBC, Haitong International Securities Group, Hua Xia Bank, ICBC, Industrial Bank, Shanghai Pudong Development Bank, Standard Chartered Bank, Zhongtai International Securities
Depository: Clearstream Banking S.A., Euroclear Bank

Huzhou Moganshan High-tech Group, 3.4% 24jan2025, USD 210 mln
Initial issue price (yield): 100% (3.40%)
The purpose of placing: Working Capital, Project Finance
Listing: Hong Kong S.E.
Bookrunner: Bank of Shanghai, China Huarong Asset Management, China International Capital Corporation (CICC), China Securities (International) Finance, DongXing Securities, Haitong International Securities Group, Huatai Securities, Industrial Bank
Depository: Clearstream Banking S.A., Euroclear Bank

Quzhou Communications Investment Group, 2.5% 25jan2025, USD 200 mln
Initial issue price (yield): 100% (2.50%)
Bookrunner: Agricultural Bank of China, Bank of China, Bank of Communications, Bank of Shanghai, CITIC Securities International, Central Wealth Securities Investment, China International Capital Corporation (CICC), China Merchants Bank, China Securities (International) Finance, China Zheshang Bank, Haitong International Securities Group, Huatai Securities, ICBC, Industrial Bank, OCBC, Shanghai Pudong Development Bank
Depository: Clearstream Banking S.A., Euroclear Bank

Hong Kong
Shenwan Hongyuan (H.K.) (-/BBB/-), 1.5% 26jan2023, USD 200 mln
Initial issue price (yield): 100% (1.50%)
The purpose of placing: General Corporate Purposes
Listing: Hong Kong S.E.

Georgia
Silknet (B1/-/B), 8.375% 31jan2027, USD 300 mln
Initial issue price (yield): 100%
Spread to US Treasury bonds: 676.5 bp
Listing: Irish S.E. Open / Comment

2022-01-21 14:48:53 ​​ Bookrunner Ranking for Kazakhstan Bonds in 2021

The final general ranking includes 14 bookrunners who placed 89 issues for a total of 1.444 trillion tenge.

The overall ranking leader was the investment company Freedom Finance (Kazakhstan), which organized the placement of 29 issues for 15 different issuers for a total of 516.5 billion tenge. The bank's placement market share was 35.76%.

Second place was taken by the investment bank Halyk Finance, which acted as bookrunner for 19 issues from 14 issuers for a total of 331 billion tenge.

Third place went to the banking group Bank CenterCredit/BCC Invest, which took part in the placement of 18 issues for ten issuers for 172.38 billion tenge.

Fourth in line is the investment company Halyk Global Markets, which organized ten issues for five issuers for a total of 117.68 billion tenge. The list of the top five is closed by Centras Securities, which organized the placement of four issues for three issuers for 67.94 billion tenge. The share of the top five bookrunners in the ranking is 83.47%.

The volume of market placements for 2021 amounted to 1.104 trillion tenge; 12 investment companies took part in the organization and placed 66 market issues during the specified period. The structure of the ranking of market placements' bookrunners does not differ significantly from the main one.

The fifth place in this ranking is occupied by the Eurasian Development Bank, which placed seven of its own issues in the amount of 51 billion tenge.

The full version of the ranking is available in the corresponding section. Open / Comment

2022-01-21 12:19:59 Upcoming issue

Issuer: NKBM

Issue description: bond

Date: soon

Bookrunners and Lead Managers: Goldman Sachs, BNP Paribas, JP Morgan, Unicredit are bookrunners, Goldman Sachs is the sole global coordinator Open / Comment

2022-01-21 10:04:24 US Treasury Securities

Yield Curve

UST 2Y YTM:
1.08% ( 4 bp)
UST 5Y YTM:
1.62% ( 0 bp)
UST 10Y YTM:
1.83% ( 0 bp)
UST 30Y YTM:
2.14% ( 0 bp)

Concerns around the timing of central banks tightening monetary policy, and rising inflation, has seen bonds yields jump this week.

Willem Sels, global chief investment officer, private banking and wealth management at HSBCsaid that HSBC had forecast that the 10-year Treasury yield would range between 1.5% and 2% over the next two years.

Comment: CNBC Open / Comment

2022-01-20 16:50:20 #Analytics
Reliance Industries Eurobond Issuance Analysis – Jan 2022

Reliance Industries Ltd (RIL) has raised a record USD 4 billion in multi-tranche long- dated Eurobond offerings in January 2022.
The company issued 10-20-40 year USD bonds. The proceeds from the bond offering will be used to refinance existing borrowings.
Newly issued bonds are set to be listed on the Singapore Stock Exchange.
The company has a total Eurobond debt of USD 9.22 billion through 22 outstanding
bonds.
S&P assigns RIL BBB+ with a Stable outlook.
Reliance has more than USD 220 billion market capitalization.

Business Profile
Reliance Industries Ltd (RIL) is the largest private-sector corporation in India. The company has expanded from a textiles and polyester player to become integrated across energy, materials, retail, entertainment, and digital services. RIL manufactures petrochemicals, synthetic fibers, fiber intermediates, textiles, blended yarn, and polyester staple fiber. The company also owns a petroleum refinery cum petrochemical complex in Jamnagar, India, that produces a wide range of products such as gasoline, superior kerosene oil, and liquefied petroleum gas. Under the "Jio" brand, the company offers telecom and digital services to 429.5 million subscribers in India. Strategic investment in Jio Platforms Ltd by Facebook and Google alongside other investors totaled USD 21 billion (33% stake). Through Reliance Retail, its diversified product portfolio includes groceries, fashion & lifestyle, consumer electronics, and connectivity across 12,201 stores. Investments from Silver Lake Partners, KKR, GA, TPG, GIC, and others amount to a USD 6 billion, 10% stake, in Reliance
Retail.

Reliance Industries Bonds – Issuances
In January 2022, RIL successfully conducted a USD 4 billion bond issuance, India's largest- ever foreign currency issuance. The 10-year bond issue's size was USD 1.5 billion, the coupon was semi-annual at 2.875%, and the spread was observed at 120 bps levels over the US treasury (UST). The 30-year and 40-year bond issue size was USD 1.75 billion and USD 750 million, the coupon was semi-annual at 3.625% and 3.75%, and the spread 160 bps and 170 bps levels over the UST. 30-year and 40-year issuances had the lowest coupon by a private sector BBB corporate from Asia ex-Japan and the first-ever 40-year tranche raised by a BBB private sector corporate from Asia ex-Japan. The process saw participation from over 200 investors from Asia, Europe, and the United States and robust demand, with a three-fold oversubscription at USD 11.5 billion. The bonds were distributed 53% in Asia, 14% in Europe, and 33% in the United States, and investors' shares stood at 69% to fund managers, 24% to insurance companies, 5% to banks, and 2% to public institutions. US treasuries' yields went up post-issuance. Later, the newly issued RIL bond yields and credit spreads both increased. Currently, the 2.875% Jan 2032, 3.625% Jan 2052, and 3.75% Jan 2062 bonds are quoted at a discount to issuance price of 3.10%, 3.88%, and 3.95, with a yield to maturity and credit spreads observed at 134 bps, 166 bps, and 179 bps.

Read the full report here Open / Comment

2022-01-20 16:25:09 Largest EM issues of Januarу 18-20

Issue | Volume

Philippines
Asian Development Bank (ADB)(Aaa/AAA/AAA), FRN 16jun2026, USD 1 bln
Initial issue amount: 250,000,000 USD
Listing: Luxembourg S.E.
Bookrunner: Goldman Sachs
Depository: Clearstream Banking S.A., Euroclear Bank

China
Asian Infrastructure Investment Bank (AIIB) (Aaa/AAA/AAA), 4.25% 27jan2027, PHP 3,8 bln
Initial issue price (yield): 100% (4.25%)
Listing: Luxembourg S.E.
Bookrunner: Standard Chartered Bank
Depository: Clearstream Banking S.A., Euroclear Bank

Cao Feidian State Holding Investment Group (Cao Guokong), 2.1% 25dec2024, USD 100 mln
Initial issue price: (yield) 100% (2.10%)
The purpose of placing: Working Capital
Listing: Hong Kong S.E.
Bookrunner: China Everbright Bank, China Merchants Bank, China Silk Road International Capital, China Zheshang Bank, Industrial Bank, Luso International Banking, Not Available, Tensant Securities
Depository: Clearstream Banking S.A., Euroclear Bank

China Water Affairs Group (Ba1/BB+/-), 4.85% 18may2026, USD 350 mln
Initial issue price (yield): 98.8% (6.13%)
Settlement Duration: 2.79 years
Bids: 620,000,000 USD
The purpose of placing: Refinance
Listing: SGX, IYXB
Bookrunner: ANZ, BNP Paribas, Bank of Communications, Bank of East Asia, CITIC Securities International, DBS Bank, Morgan Stanley
Depository: Clearstream Banking S.A., Euroclear Bank
Arranger Legal Adviser (International law): Davis Polk & Wardwell
Issuer Legal Adviser (Domestic law): Sidley Austin
Issuer Legal Adviser (International law): Sidley Austin

Huzhou City Investment Development Group (Baa3/-/BBB), 2.85% 25jan2025, USD 300 mln
Initial issue price (yield): 100% (2.85%)
The purpose of placing: General Corporate Purposes, Working Capital
Listing: Hong Kong S.E.
Bookrunner: Bank of China, Bank of Communications, CCB International, CLSA, CNCB Capital, China Everbright Bank, China International Capital Corporation (CICC), Haitong International Securities Group, Industrial Bank, Orient Securities International Holdings, Standard Chartered Bank
Depository: Clearstream Banking S.A., Euroclear Bank

Jiangsu Gaokai Investment Development Group, 2.1% 24jan2025, USD 100 mln
Initial issue price (yield): 100% (2.10%)
The purpose of placing: Working Capital, Project Finance
Listing: Hong Kong S.E.

Jiaozuo City Investment Group, 5.5% 20jan2023, USD 100 mln
Initial issue price (yield): 100% (5.50%)
The purpose of placing: General Corporate Purposes, Working Capital, Project Finance, Refinance
Bookrunner: CNCB Capital, Central China Securities, Guotai Junan Securities, Guoyan Securities Investment, Shenwan Hongyuan Group
Depository: Clearstream Banking S.A., Euroclear Bank

Romania
Romania (Baa3/BBB-/BBB-), 3% 27feb2027, USD 1,35 billions
Initial issue price (yield): 99.391% (3.13%)
Spread to US Treasury bonds: 150 bp
Listing: Luxembourg S.E.
Bookrunner: Citigroup, Erste Group, HSBC, ING Bank, JP Morgan, Societe Generale
Depository: Clearstream Banking S.A., DTCC, Euroclear Bank

Romania (Baa3/BBB-/BBB-), 3.625% 27mar2032, USD 1,06 billions
Initial issue price (yield): 99.37% (3.70%)
Spread to US Treasury bonds: 185 bp
Listing: Luxembourg S.E.
Bookrunner: Citigroup, Erste Group, HSBC, ING Bank, JP Morgan, Societe Generale
Depository: Clearstream Banking S.A., DTCC, Euroclear Bank Open / Comment

2022-01-20 14:41:06 Upcoming issue

Issuer: IMSA

Issue description: 7-year deal

Date: soon

Bookrunners and Lead Managers: Credit Suisse, JP Morgan Open / Comment

2022-01-20 12:40:27 Upcoming issue

Issuer: Nationwide

Issue description: RMBS

Date: soon

Bookrunners and Lead Managers: Barclay, BNP Paribas, Bank of America, Citi Open / Comment

2022-01-20 10:09:30 US Treasury Securities

Yield Curve

UST 2Y YTM:
1.04% ( 2 bp)
UST 5Y YTM:
1.62% ( 3 bp)
UST 10Y YTM:
1.83% ( 4 bp)
UST 30Y YTM:
2.14% ( 4 bp)

Bond yields have been surging this year amid growing investor anticipation that the Federal Reserve could soon start to hike interest rates.

The 2-year Treasury yield, which reflects short-term interest rate expectations, also topped 1% for the first time in two years on Tuesday.

Comment: CNBC Open / Comment