Primary Credit Watch

We will be starting a regular new bond issue watch for our readers to keep on top of what’s happening in the primary market.  I think there will be interesting opportunities, particularly in the HY space, where there has been an acute dearth of new issues.  I would expect the first few issues to come with a decent new issue premium, and for that to get gradually eroded as more issuers hit the market. Watch this space…

China Communications to Sell $ Perp NC5, IPT 3.8% Area

Issuer: CCCI Treasure Ltd.
Guarantor: China Communications Construction Co.
Guarantor ratings: A3/–/A-
Expected issue ratings: A3/–/–
Reg S
Call option: Callable at the 5Y and distribution dates thereafter
Distribution rate step up/reset: From first call date and onwards reset every 5 yrs to prevailing T5 + initial spread + 500bps
Additional step-up: 500bps step-up on change of control event; breach of covenant; relevant indebtedness default event or dividend stopper breach
JGCs/JLMs/JBRs: UBS, HSBC, Morgan Stanley

Haitong Intl to Sell $Bench 5Y Bonds, IPT +245bp Area (~3.81%)

Issuer: Haitong Intl Finance Holdings 2015 Ltd.
Guarantor: Haitong Securities Co.
Guarantor rating: –/BBB/–
Expected issue rating: –/BBB/–
Reg S
UOP: For increasing share capital of Haitong Intl Securities, other GCP
JGCs: Haitong Intl, StanChart, BESI
JBRs/JLMs: Haitong Intl, StanChart, CMBI

Formosa Plastics to Sell $Bench 10Y Bonds, IPT +180bp Area (~3.72%)

Issuer: Formosa Group (Cayman) Ltd.
Guarantors: Formosa Plastics Corp., Nan Ya Plastics Corp., Formosa Chemicals & Fibre Corp., Formosa Petrochemical Corp.
Each guarantor guarantees 25% of the payment obligations of issuer on a several basis
Guarantor rating: –/BBB+/– for all guarantors
Expected issue rating: –/BBB+/–
Reg S
JBRs/JLMs: BOC HK, HSBC, ANZ, Mizuho Securities
Co-managers: BofAML, DBS Bank, StanChart, UBS

Central China Real Estate to Sell USD Long 5NC3, IPT 9.125% Area

Issuer: Central China Real Estate
Subsidiary guarantors: Certain of the co.’s restricted subsidiaries outside the PRC
Security to be granted: Capital stock of all of the initial subsidiary guarantors owned by the co. or the subsidiary guarantor pledgors
Issuer ratings: Ba3/BB-/–
Expected ratings: Ba3/BB-/–
Reg S
Tenor: January 2021, first interest payment January 2016
UOP: To repay debt and GCP
JBRs: BNP Paribas, Deutsche Bank, Morgan Stanley, OCBC