Asia G3 falls shy of Q1 record
Bonds league tables Markets begin to reopen after March madnessBY JIHYE HWANGInternational bond sales from
Asia posted their third-biggest
quarter on record in the first
three months of 2020, even
after the coronavirus pandemic
brought deals to a standstill for
much of March.
G3 bond issuance from
Asia, excluding Japan and
Australasia, rose to US$89.6bn
in the first quarter, up 5% on
the same period last year and
just shy of 2017’s Q1 record
of US$90.3bn. The March
meltdown, however, reined in
new issues after a breakneck
start to the year with
US$49.0bn printed in January, a
monthly record.
“March was 180 degrees
different from how the year
started with some extreme
repricing of commodity-linked
names, in particular, and
significant widening in overall
spreads,” said Alan Roch, head
of bond syndicate for Asia at
Standard Chartered Bank.
Indonesian mining company
Bayan Resources’ debut US
dollar offering due 2023, issued
in January, fell 30 points to 66
last month, while resources-rich Indonesia’s five-year
sovereign CDS surged over
100bp.
There were no public
offerings of Asian US dollar
bonds from March 12-30, save
for a handful of small, club
deals from Chinese property
companies. Amid the turmoil
in the global markets, some
issuers shifted to local currency
funding and others sealed
private placements.
For the first two months
of the year, however, G
currency bond sales from
Asia soared 32% year-on-year
to US$77.8bn on the back
of strong risk appetite and
widespread expectation that
central banks would remain
accommodative.
“China high-yield was
the most visible sector
that benefited from the
constructive market backdrop,
but India’s non-banking
financial companies as well
as deals from the renewables
sector were also well-received,”
said Roch.
Chinese G3 bond issuance
rose 12% in the first two
months of this year from 2019
to US$31.89bn, while thatfrom India jumped over 80% to
US$7.05bn.US REVIVAL CATCHES ON
Although the global pandemic
sapped deal flows in Asia last
month, the rescue package
from the US government and
the Federal Reserve unleashed
a flood of investment-grade
corporate issues in the US last
month. March’s US$256.47bn
total smashed the monthly
record, according to IFR data,
surpassing total high-grade
volumes for the previous three
months combined.
Asia’s primary markets
have started to join that party
with AIA Group and Baidu
completing US-anchored deals
on March 31 and April 1,
respectively.
“AIA, with their highly
successful transaction this
week, reopening the market for
issuers from the region, showed
the extent of the appetite for
high-quality credit,” said Sean
McNelis, global co-head of debt
capital markets at HSBC.
“The outlook for the public
markets will clearly depend
on how the Covid-19 situation
unfolds, but as we’ve seen inthe US and Europe over the last
two weeks, clients are keen
to come to market and the
demand is clearly there with
order books being strong in
recent weeks.”
Still, there are some obstacles
holding back further issuance
from Asia, such as a reluctance
to offer big new issue
concessions to attract cautious
investors.
“Asia spreads for many
sectors actually look expensive
versus the US and the investor
base remains currently
defensive after a bruising
March,” said Roch. “But, the
mood is very different from a
couple of weeks ago and much
more constructive.”
HSBC topped the first-
quarter league table for Asia
G3, excluding Japan and
Australia, with US$5.2bn of
volume from 56 issues, despite
its market share shrinking by
3.9 percentage points from
last year. Standard Chartered
was second with US$4.55bn,
just ahead of Citigroup with
US$4.27bn. Bank of China was
the only Chinese house in
the top 10 with US$2.79bn of
volume. League tables
10 International Financing Review Asia April 4 2020Top bookrunners of Asian fixed and
floating-rate bonds for G3 currencies
ex-Japan, inc-Australia
(inc-Samurais and Yankees)
1/1/20 – 31/3/
Amount
Name Issues US$(m) %
1 HSBC 62 6,770.0 6.
2 Citigroup 40 6,472.2 6.
3 Standard Chartered 42 4,550.5 4.
4 Goldman Sachs 21 4,549.2 4.
5 UBS 35 4,347.7 4.
6 JP Morgan 28 4,296.6 4.
7 Morgan Stanley 19 3,824.6 3.
8 Credit Suisse 36 3,819.3 3.
9 RBC Capital 5 3,720.1 3.
10 Bofa Sec 17 3,543.7 3.
Total 186 102,017.
*Market volume
*Includes Asian Development Bank issuance.
Proportional credit
Source: Refinitiv data SDC Code: ARTop bookrunners of Asian fixed and
floating-rate bonds for G3 currencies
ex-Japan and Australia
(inc-Samurais and Yankees)
1/1/20 – 31/3/
Amount
Name Issues US$(m) %
1 HSBC 56 5,199.5 5.
2 Standard Chartered 42 4,550.5 5.
3 Citigroup 33 4,268.5 4.
4 UBS 33 4,015.2 4.
5 Goldman Sachs 18 3,870.8 4.
6 Credit Suisse 36 3,819.3 4.
7 JP Morgan 25 3,485.5 3.
8 Morgan Stanley 17 3,325.6 3.
9 Barclays 31 3,235.3 3.
10 Bank of China 38 2,795.0 3.
Total 172 89,615.*Market volume
Proportional credit
Source: Refinitiv data SDC Code: ARTop bookrunners of
all Asian currencies
(excluding Japan and Australia)
(inc-certificates of deposit)
1/1/20 – 31/3/
Amount
Name Issues US$(m) %
1 Bank of China 529 37,927.4 7.
2 Citic 464 34,984.0 6.
3 ICBC 477 33,884.1 6.
4 CCB 503 31,549.9 5.
5 BoCom 419 26,782.0 5.
6 CSC Financial 304 24,331.8 4.
7 Industrial Bank 324 23,139.8 4.
8 ABC 368 21,372.1 4.
9 China Merchants Bank 217 16,771.8 3.
10 China Minsheng 197 14,323.6 2.
Total 2,734 538,725.*Market volume
Proportional credit
Source: Refinitiv data SDC Code: ASTop bookrunners of
all Asian currencies
(excluding Japan, Australia and
China)
(inc-certificates of deposit)
1/1/20 – 31/3/
Amount
Name Issues US$(m) %
1 NH Inv & Sec 141 7,388.3 9.
2 KB Financial 132 5,575.3 7.
3 Korea Investment 76 4,461.3 5.
4 Axis 43 3,617.7 4.
5 DB Financial Invest 42 3,314.4 4.
6 Kyobo Life 45 2,840.9 3.
7 Kiwoom Sec 33 2,525.1 3.
8 HSBC 40 2,495.5 3.
9 ICICI Bank 44 2,356.0 3.
10 Hana Financial 18 2,345.0 3.
Total 1,093 76,885.
*Market volume
Proportional credit
Source: Refinitiv data SDC Code: AS1aB 1 HZVLQGG