Brekkie Bond Wrap

It was a very strong day in Asian HY led by Kaisa. Credit took the cue from the equity markets where Chinese property stocks listed on HKSE were up more then 10%! The Kaisa curve was up 6-7 points for the day. As mentioned in yesterday’s update, the next key event will be the deadline of the grace period for the missed coupon payments on the 2017s and 2018s. We are hearing of renewed interest in the likes of laggards like Fantasia, Glorious Properties, and Hopson investors – a clear indication of the degree of bullishness in the sector. Not to be left behind, Indon and Indian corps also had a firm session with Gajah Tunggal (+1pt) and Vedanta (+0.75pt) leading the way.

As expected, the USD new issue pipeline has come to life with the market on fire. In the IG space, we are hearing of China Communications doing a Perp NC5 at initial price talk of 3.8% (wow 3 handle for a perp!), Haitong International doing a 5yr at T+245, and China Cinda is also on the road for a potential USD deal. In the HY space, Central China Real Estate is doing a long 5yr at initial guidance of 9.125%. Good luck.