HY boom sets G3 on record path
Bonds league tables Chinese property, LGFV issuers power first-half volumesBY DANIEL STANTONAsian issuers sold US$186bn of
bonds in G3 currencies in the
first half of 2019, up more than
23% on the same period a year
ago, as a resurgent high-yield
market boosted activity.
At that rate, issuance from
Asia ex-Japan ex-Australia is
on track to beat 2017’s record
US$335bn full-year total,
according to Refinitiv data.
HSBC and Citigroup were
the top two underwriters, just
as last year, with US$15.9bn
and US$9.7bn of volume,
respectively, up 33% and 12%
from a year ago, according
to Refinitiv data. Standard
Chartered booked US$9.0bn
for the first half, up 41% on the
same period a year ago, to climb
two places to number three.
A deluge of China property
deals and offshore bonds from
Chinese local government
funding vehicles, some of which
had offshore approvals due to
expire at the end of June, gave
the league table a differentlook from last year. Perhaps
surprisingly, Bank of China was
the only Chinese bank in the
top 10, retaining its number
four position from last year with
volumes of US$8.2bn.
UBS, Mizuho and Haitong
each jumped eight places in the
league table compared with the
same period a year ago. UBS
saw 82% growth in volumes to
US$6bn and eighth position,
helped by its strong China high-
yield franchise.
Mizuho and Haitong each
more than doubled their deal
volumes this year, to US$5.9bn
and US$5.6bn, respectively,
jumping to number nine and 11
in the league table.
Two American banks had a
slow start to the year: Morgan
Stanley was third in the league
table at the halfway point last
year, but dropped to number 14
as its deal volume fell by more
than 40% to US$4.5bn, while
Bank of America Merrill Lynch
saw a 22% decline and dropped
to 17th from sixth last year.
The first-half high-yieldrated total of US$45.0bn
smashed 2018’s full-year tally
of US$35.2bn. Credit Suisse
topped the table with US$4.5bn
of volume, more than double
its total for the whole of 2018.
Haitong and Citic Securities took
second and third places, with
US$3.1bn each, and were among
five Chinese underwriters in the
top 10.
The huge increase is partly
due to tricky issuance conditions
last year, when US rates were
expected to follow an upward
path and Asia high yield was
all but closed for eight months.
That also encouraged some
Asian issuers to print in 144A/
Reg S format to reach a broader
range of investors.
“There has been an uptick in
144A issuance in the HY market
in the first half of 2019 with US
investors keen to put money
to work in this region,” said
Haitham Ghattas, co-head of the
financing and solutions group
for Asia Pacific at Deutsche
Bank.
“As we saw in the secondhalf of last year, when the Reg
S investor base switches off,
this can seriously limit market
access for Asian HY borrowers.”
Some Chinese local
government funding vehicles
may find themselves shut out
of the dollar bond market in
future as the result of increasing
regulatory restrictions,
explaining their rush to come
to market. China has been
clamping down on offshore
bond approvals for debut
issuers, but companies find it
easier to obtain permission to
issue when they have existing
dollar bonds to refinance.
Chinese property companies
seized on improved market
conditions offshore, with many
issuing several times. Zhenro
Properties Group, for instance,
came to the dollar market six
times in the first half.
“I wouldn’t be surprised if a
lot of these guys keep printing
in the second half,” said a DCM
banker. “We are also seeing
plenty of debut issuers wanting
to come.” League tables
Top bookrunners of Asian fixed and
floating-rate bonds for G3 currencies
ex-Japan, inc-Australia
(inc-Samurais and Yankees)
1/1/19 – 30/6/
Amount
Name Issues US$(m) %
1 HSBC 167 19,028.4 8.
2 Citigroup 93 12,444.1 5.
3 JP Morgan 64 10,464.0 4.
4 Standard Chartered 94 9,038.6 4.
5 Bank of China 103 8,168.7 3.
6 Credit Suisse 66 8,121.3 3.
7 UBS 76 7,391.4 3.
8 Goldman Sachs 38 6,817.9 3.
9 BNP Paribas 63 6,702.8 3.
10 Mizuho 57 6,085.6 2.
11 Credit Agricole 39 5,919.6 2.
12 BAML 51 5,894.8 2.
13 Haitong Sec 111 5,645.6 2.
14 Citic 92 5,604.3 2.
15 Morgan Stanley 53 5,532.1 2.
Total 441 212,730.
*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)
1/1/19 – 30/6/
Amount
Name Issues US$(m) %
1 HSBC 149 15,903.7 8.
2 Citigroup 80 9,713.5 5.
3 Standard Chartered 93 8,982.0 4.
4 Bank of China 103 8,168.7 4.
5 JP Morgan 53 7,635.9 4.
6 Credit Suisse 63 7,392.8 4.
7 Goldman Sachs 36 6,503.9 3.
8 UBS 69 6,002.5 3.
9 Mizuho 56 5,908.9 3.
10 Credit Agricole 37 5,782.8 3.
11 Haitong Sec 111 5,645.6 3.
12 Citic 92 5,604.3 3.
13 BNP Paribas 49 4,669.3 2.
14 Morgan Stanley 47 4,539.3 2.
15 Deutsche 57 4,497.6 2.
Total 392 185,991.*Market volume
Proportional credit
Source: Refinitiv data SDC Code: ARTop bookrunners of
all Asian currencies
(excluding Japan and Australia)
(inc-certificates of deposit)
1/1/19 – 30/6/
Amount
Name Issues US$(m) %
1 Bank of China 587 79,953.4 8.
2 ICBC 557 70,368.5 7.
3 CCB 558 62,436.3 6.
4 BoCom 480 58,248.9 5.
5 ABC 385 44,998.9 4.
6 Citic 397 44,914.2 4.
7 CSC Financial 294 36,126.0 3.
8 Industrial Bank 359 31,202.1 3.
9 China Merchants Bank 255 23,317.1 2.
10 China Minsheng 213 22,787.2 2.
11 CICC 103 21,257.1 2.
12 SPDB 231 20,457.6 2.
13 Guotai Junan Sec 182 19,188.8 1.
14 ADBC 147 16,308.9 1.
15 Haitong Sec 136 16,040.9 1.
Total 5,006 995,966.*Market volume
Proportional credit
Source: Refinitiv data SDC Code: ASTop bookrunners of
all Asian currencies
(excluding Japan, Australia and China)
(inc-certificates of deposit)
1/1/19 – 30/6/
Amount
Name Issues US$(m) %
1 KB Financial 291 13,925.9 8.
2 NH Inv & Sec 191 11,117.8 6.
3 Korea Investment 292 10,436.7 6.
4 Axis 103 7,348.1 4.
5 Kyobo Life 158 7,273.4 4.
6 Mirae Asset Daewoo 153 6,535.7 3.
7 HSBC 98 5,591.0 3.
8 Standard Chartered 54 5,221.1 3.
9 Kiwoom Sec 126 5,076.7 2.
10 ICICI Bank 93 5,061.9 2.
11 DB Financial Invest 100 4,676.7 2.
12 SK Sec 57 4,360.0 2.
13 Hana Financial 120 3,748.5 2.
14 CIMB Group 48 3,655.8 2.
15 DBS 41 3,606.8 2.
Total 2,841 173,537.*Market volume
Proportional credit
Source: Refinitiv data SDC Code: AS1a