Brekkie Bond Wrap

In the IG space, after opening 2-3 better, the tightening was reversed and we ended a touch softer on the day.  Indian credits continued to be sought after and outperformed the broader market.   The new Sinopec 5yr, 10yr and 30yr issues tightened 5bp tightened 5bp on the break as rates backed up.  However news later in the day that CNOOC was potentially coming the market pushed spreads to end 1bp wider than reoffer.  It seems like new supply will keep a lid  on how much spreads can tighten.

HY bonds did better with better buying seen in the more liquid bonds,  Jingrui Holdings priced a 3 year USD150mm deal at 13.25%. This looks like another addition to the illiquid single-B space.  Don’t expect much activity in this one.   Pelindo did a USD1.1b 10-yr and USD500mm 30-yr deal at 4.375% and 5.5% respectively.   In the SGD market, United Envirotech did a 3yr SGD issue at 4.7%.  With Citic owning a 54% stake, and CoC put at 101, this seems like an attractive short-dated carry trade.  Bonds are opening up firm, around  100.40-100.70 this morning.  This is not surprising.  After all, we did get a SGD1.8b order book! When was the last time we saw that for a SGD HY new issue?  Probably back to Central China Real Estate or Yanlord in the first half of last year…