Green RMBS premiere 09 First reset on PRC perps 10 Indian insurers raise sub debt 11
GOLDEN ENERGY AND RESOURCES
managed to print a US$150m
five-year non-call three issue,
but had to pay 9.375%, the
highest yield in the Asian G
market so far this year.
The volatility forced some
Chinese issuers to push back
their offshore issuance plans
in the hope that more benign
conditions will prevail after the
Lunar New Year holiday.
“We’ve kept monitoring the
markets but didn’t see a very
good window to launch the
deals,” said a syndicate banker
from a Chinese bank. “Investors
are very cautious, especially
as some of our deals are those
private, unlisted high-yield
names, which find it hard to
draw investors’ interest in a
risk-off environment.”
Still, a few Chinese issuers
printed US dollar bonds last
week, including property
developers SUNSHINE 100 CHINA
HOLDINGS and FANTASIA HOLDINGS
GROUP, and Chinese local
government financing vehicles
FUJIAN ZHANGLONG GROUP and
SHANGRAO INVESTMENT HOLDING
GROUP. Most of these deals were
said to be heavily anchored,
giving them confidence that
they could make it through a
shaky market.
On the other hand, nothing
was heard from Guorui
Properties, Jiangyin Chengxing
Industrial Group, Guangzhou
City Construction Investment
Group, Shandong Hi-Speed
Group, Inner Mongolia BaoTou
Steel Union, HC International,
Hubei Science & Technology
Investment Group and Taizhou
Huaxin Pharmaceutical
Investment, all of whom
originally aimed to issue bonds
late last month or earlier this
month, but now will have to
wait until late February to getgoing, according to market
sources.CLOCK TICKING
Chinese issuers are unlikely
to launch deals this week,
considering that settlement
usually takes four or five
working days. Lunar New Year
falls on February 16 and China
has a week-long holiday from
February 15.
Bankers said deal flow from
China was likely to resume in
the week of February 26.
However, as many issuers have
offshore debt issuance quotasfrom the National Development
and Reform Commission that
will expire by the end of March,
that will not leave much time for
them to complete their planned
bond sales.
Indeed, many Chinese issuers
wanted to complete their
deals before Lunar New Year,
according to bankers.
“Nobody know whether the
market will be better or even
worse after the holidays,” one
of the bankers said. “They want
to use up their offshore debt
quotas before they expire, as
there is no assurance whether
they can secure an extension
from NDRC or whether they
will get into trouble when
applying for new quotas.”
However, another banker
dismissed some of the worries.
He said there are examples of
other issuers getting NDRC
extensions.
“I think NDRC will be
reasonable in this regard as
it also knows the market
situation,” the banker said.
He said he had seen a list
of more than 10 companies
to which NDRC had granted
offshore debt issuance quota
extensions from end-December
last year to end-June this year.the people.
The first three D-share
listings are expected to raise
between €500m (US$614m) and
€1bn for a total of up to €3bn,
Reuters reported.
So far, Frankfurt has
struggled to attract listings
from major Chinese companies,
which generally prefer to float
in the domestic A-share market
for higher valuations, or in
Hong Kong or the US, where
investors are more familiar
with such issuers.
A series of scandals involving
small-cap Chinese companies
listed in Frankfurt has also
dented investor interest in PRC
entities.
In 2014, the chairman of
Ultrasonic, a small Chinese
shoemaker listed on the
Frankfurt Stock Exchange,
disappeared, together with
his son, with US$60m from
the company’s bank account.In the same year, the CEO of
Frankfurt-listed Youbisheng
Green Paper also disappeared.
Haier’s move to sell
shares overseas fits with thecompany’s strategy to raise
its international profile as a
leading Chinese manufacturer,
especially as Germany isrenowned for its expertise
in white goods, according to
another source.
Haier bought General
Electric’s white-goods businessin 2016 and claims to be the
world’s biggest maker of large
home appliances.
According to the company’s
2016 annual report, citing
research from Euromonitor,
Haier controlled 10.3% of the
global market for large home
appliances, ranking No 1 for
the eighth consecutive year.
Shanghai Stock Exchange
said last year that CEINEX
would initially welcome
D-share offerings from China’s
blue-chip listed companies,
especially manufacturers
looking to expand overseas.
Issuing D-shares could help
Chinese companies increase
the awareness of their brands
in Europe, and promote their
business in the European
market, according to SSE. International Financing Review Asia February 10 2018 5
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CREDIT SPREADS IN ASIA HAVE REVERSED COURSE THIS MONTHSource: Markit via Thomson Reuters Eikon5560657075808590Jul 17 Aug 17 Sep 17 Oct 17 Nov 17 Dec 17 Jan 18 Feb 18
iTraxx Asia ex-Japan IG index (bp)“The stock exchange would want the company to
do a landmark transaction with a sizable offering,
say around US$1bn, while the company may not
want to sell a big chunk of shares at a discount.”