Guotai Junan Securities Co

Asian bond issuers drew mixed responses this week as they pushed out last minute deals before regulatory funding quotas expire at the end of the month. As new issue premium demands and small fundraising sizes continue to hinder borrowers, attention has turned to whether the forthcoming holidays will bring a market reset. Morgan Davis reports.

China’s Agile Group Holdings and Taizhou Huaxin Pharmaceutical Investment Co reopened their old bonds on the back of some anchor orders on Monday, in an attempt to use as much of their fundraising quotas as possible before the end of the month.

Four Chinese issuers hit the market with new transactions on Monday, despite the credit market ending on a weak note last week. As the companies try to make use of their remaining fundraising quotas, the focus remains on new issue premiums.

Shandong Iron & Steel Group Co and a Chinese government-owned entity from Xuzhou both took a cautious approach to their dollar bonds on Thursday in a market that has become increasingly volatile.

GLP is lining up a three year Rmb1.2bn ($190m) bond in the interbank market next week, less than two months after the issuer sold a bond of the same size in the exchange market.

Asia’s dollar bond issuers were back in the market on Thursday after taking a pause during the US Federal Open Market Committee meeting this week.

China’s Xinyuan Real Estate Co has sold a par-priced $200m deal, paying one of the highest coupons for a public dollar bond in Asia so far this year.

Taizhou Huaxin Pharmaceutical Investment Co executed a club-style deal on Thursday, raising $150m from a three year bond. It wasn’t the only Chinese firm wooing the buy-side. State-owned Tewoo Group opted for a perpetual deal, while Shimao Property Holdings tapped the offshore renminbi (CNH) market for the first time.

China Resources Land is lining up the Panda bond market’s first deal after the Chinese New Year holiday. The Rmb6bn ($946.6m) three year bond, the biggest offer in the asset class in six months, may kick start a streak of onshore transactions, said onshore DCM bankers.

Bank of China joined its Chinese peers to sell floating rate notes (FRNs) offshore, while Fantasia Holdings Group Co added to the momentum in the high beta property sector. The two finished off an incredible week for both financial and corporate borrowers from the Mainland.

Modern Land (China) Co sold its third green dollar bond on Tuesday, as it remains the only Chinese green issuer from the high yield property sector.

Investors interested in Chinese property bonds had plenty to choose from this week. Eight high yield real estate names raised more than $2.4bn in dollar bonds, with yields ranging from low-6% to over 10%.