Loans and High Yield

Asia’s bond market suffered prolonged bouts of volatility in the first half of the year. Bankers, credit analysts and asset managers are trying to shake off the disappointments in both the primary and secondary markets, but the signs are not good. Addison Gong reports.

Future Land Holdings Co raised $200m from a slightly unusual 3.75 year bond on Tuesday, but found investors distracted by the landmark Trump-Kim summit in Singapore.

Does it matter if a green bond becomes separated from the green assets that underlie it? The link keeps the issuer honest — but shouldn’t the green bond market be doing more than that?

French supermarket group Casino has announced a €1.5bn asset disposal plan, which should take pressure of holding company Rallye’s bonds. The asset sales are an attempt to deleverage amid sharp volatility in the company’s shares.

French banks will have to comply with a countercyclical capital buffer requirement as a means of promoting financial stability amid a rapid increase in corporate debt levels.

China Aoyuan Property Group raised a larger than planned $225m from a tap of its existing note on Monday, but had to pay up for the transaction. A Chinese local government financing vehicle (LGFV), on the other hand, fell short of its size expectation.

Singapore’s Wilmar International has raised a $200m sustainability-linked loan, the second of its kind from the agribusiness company in seven months.

Medical diagnostics firm Unilabs launched a benchmark size extension of its loan debt on Monday, as a range of investors clamour for paper despite issuance volumes running ahead of last year’s record pace.

A new proposed European Parliament and Council directive aimed at non-EU lenders and non-bank institutions will cause “significant uncertainty and disruption” to the primary and secondary syndicated loan markets, the Loan Market Association has warned.

The Asian debt market is set for a modest week in terms of primary issuance volume, as more borrowers continue to engage with investors even after completing roadshows.

The iShares 0-5 Year High Yield Corporate Bond exchange traded fund (SYHG), which tracks short dated US high yield credit, has unwound almost 40% of its asset base in the last week and a half after investor Charles Schwab pulled its money to put into another high yield fund.

Dutch data centre operator Interxion sold a €1bn bond deal this week, the largest fixed rate junk bond of 2018 so far, as the European high yield primary market starts to warm up after a quiet couple of weeks.