IFR - 07.07.2018

ASIA-PACIFIC

CHINA

HUACHEN SELL-OFF ON PARENT DEFAULT

Power-plant operator HUACHEN ENERGYSû
53MûûBONDSûDUEûûPLUNGEDû
ûPOINTSûTOûAûCASHûPRICEûOFûûONû&RIDAYû
after its Shanghai-listed parent WINTIME
ENERGY defaulted on onshore bonds.
)NûAûSTOCKûEXCHANGEûlLINGûONû&RIDAYû
7INTIMEûSAIDûITûHADûFAILEDûTOûMAKEû
REPAYMENTûONû2MBBNû53M ûû

DAYûCOMMERCIALûPAPERûDUEûONûULYûû
The principal and interest due totalled
2MBBN
4RADINGûOFû7INTIMESûSHARESûANDûITSû
other onshore bonds has been halted from
ULYû
7INTIMEûSAIDûITûWASûTAKINGûACTIONSûTOû
RAISEûFUNDSûTOûREPAYûTHEûDEBTû4HEûCOMPANYû
HADûPREVIOUSLYûSAIDûITûPLANNEDûTOûAPPLYûFORû
NEWûCREDITûFACILITIESûFROMû#HINAû#ITICû"ANKû
and Ping An Trust, and to issue new
onshore bonds.
Huachen, which issued its debut US
DOLLARûBONDûLASTû-AYûISûRATEDû"ûBYû
-OODYSûANDûITSûûBONDSûAREûRATEDû"
Its bonds had seen selling pressure since
LATEû-AYûAFTERûTHEû3HANGHAIû3TOCKû
%XCHANGEûQUESTIONEDû7INTIMESûPOTENTIALû
LIQUIDITYûRISKû4HEûBONDSûWHICHûWEREûSTILLû
TRADEDûATûABOVEûTHEûûLEVELûINûMID
-AYû
had fallen to around 68 late last month,
according to a bond trader.

JIUDING FIXES CONSOLIDATION DELAY

JIUDING GROUP FINANCE has secured consent
FROMûHOLDERSûOFûTHEû53Mûûû
ADDITIONALûBONDSûITûISSUEDûLASTû/CTOBERûVIAûAû
TAPûTOûRESOLVEûAûCONSOLIDATIONûDELAY

"ONDHOLDERSûAGREEDûONû*ULYûûTOûAMENDû

certain terms of the notes to make them

fungible with the original bonds in the same

LINEûACCORDINGûTOûAûSTOCKûEXCHANGEûlLING

The bonds, issued via a reopening on

/CTOBERûûWEREûSUPPOSEDûTOûBEû

CONSOLIDATEDûWITHûTHEûORIGINALû53Mû

ûLINEûISSUEDûONû*ULYûûûONûORûAFTERû

&EBRUARYûûûBUTûTHISûWASûDELAYEDûDUEûTOû

hTECHNICALûISSUESvûAûBANKERûWHOûWASû

involved in the deal told IFR earlier.

It is rare that bonds issued from a tap are

not made fungible with the original bonds

after such a long time, another banker had

said.

Jiuding Group Finance on June 8 launched

a consent solicitation to amend the terms

and conditions of the additional bonds and

the supplemental trust deed between the

ISSUERûTHEûGUARANTORûANDû#ITICORPû

International as trustee, to authorise the

consolidation into a single series.

4HEûEXTRAORDINARYûRESOLUTIONûWASûDULYû

passed in the meeting with bondholders on

*ULYûû2ELATEDûPARTIESûHAVEûENTEREDûAûSECONDû

supplemental trust deed and the additional

bonds are expected to be consolidated and

form a single series with the original notes

ONûORûBEFOREû*ULYûûACCORDINGûTOûTHEûlLING

The Reg S senior unsecured bonds, rated

""ûBYû30ûCARRYûAûGUARANTEEûFROMûTHEû

ISSUERSûPARENTû4ONGCHUANGJIUDINGû

Investment Management Group.

4HEûBONDSûHAVEûFALLENûBYûMOREûTHANûû

points since March and were quoted at

ûONû*UNEûûTHEûDATEûONûWHICHûTHEû

consent solicitation was launched. The

BONDSûWEREûQUOTEDûATûûONû*ULYûû

according to Thomson Reuters data.

4ONGCHUANGJIUDINGûISûLISTEDûONû#HINASû

.ATIONALû%QUITIESû%XCHANGEûANDû1UOTATIONSû

THIRDûBOARD    û(ONGû+ONGûINSURERû&4û,IFEû

)NSURANCEû#HINESEûBROKERAGEû*IUZHOUû

3ECURITIESûANDûPRIVATEûEQUITYûlRMû+UNWUû

Jiuding Investment Holdings are some of its

major operating units.

FITCH DOWNGRADES GANGTAI GROUP

Real estate developer and jeweller GANGTAI

GROUP, which issued a debut US dollar bond

INû-ARCHûWASûDOWNGRADEDûBYû&ITCHûANDûISû

facing a possible further downgrade.

ALL INTL EMERGING MARKETS BONDS

BOOKRUNNERS: 1/1/2018–30/6/2018

Asia-Pacific

Managing No of Total Share

bank or group issues US$(m) (%)

1 HSBC 123 13,735.25 8.2

2 Citigroup 64 8,681.42 5.2

3 Bank of China 92 8,422.28 5.0

4 Standard Chartered 73 7,228.56 4.3

5 Morgan Stanley 36 7,114.63 4.2

6 BNP Paribas 52 6,480.41 3.9

7 Credit Suisse 43 5,492.28 3.3

8 Citic 55 5,210.77 3.1

9 BAML 38 4,720.07 2.8

10 Deutsche Bank 44 4,718.45 2.8

Total 361 167,634.46

Excluding equity-related debt.

Source: Thomson Reuters SDC code: L4

ALL INTL EMERGING MARKETS BONDS
BOOKRUNNERS: 1/1/2018–30/6/2018
Managing No of Total Share
bank or group issues US$(m) (%)

1 Citigroup 140 34,649.04 9.8
2 HSBC 175 29,724.31 8.4
3 JP Morgan 89 20,952.24 6.0
4 Deutsche Bank 71 20,109.96 5.7
5 Standard Chartered 113 18,868.67 5.4
6 BNP Paribas 81 13,534.77 3.8
7 BAML 63 11,008.54 3.1
8 Morgan Stanley 50 10,318.39 2.9
9 Credit Suisse 61 9,934.27 2.8
10 Bank of China 96 9,882.17 2.8
Total 557 351,774.36
Excluding equity-related debt.

Source: Thomson Reuters SDC code: L1

Tough months ahead for

Asian HY

„ ASIA High-yield issuance tumbles in Q2, as new-issue premiums soar

Asian high-yield credit markets face another

tough six months amid expectations that the

volatility that rocked issuance in the first half will

continue at least until year-end.

Rising interest rates, a flood of offshore supply

from China and weak secondary markets have

dampened demand for Asian high-yield debt in

the first half of 2018.

With the US Federal Reserve expected to stick

to its monetary tightening cycle for this year and

next, and concerns about rising defaults in China

and a wave of maturities due from next year,

investors are treading carefully, particularly as

secondary trading levels continue to face selling

pressures.

Asian high-yield volumes dropped only slightly

to US$21.7bn in the first half of this year from

US$23.7bn in the same period in 2017, according

to Thomson Reuters data.

But the pace of issuance tumbled in the

second quarter, with high-yield volumes down

22% year-on-year, the data showed. The average

yield on a five-year Asian US dollar high-yield

bond touched 7.86% last week, the highest level

since July 2013, according to Thomson Reuters

data.

Much of this year’s issuance has come in a

weak market, despite a bullish start that bankers

said had initially come as a surprise. In the first

quarter, high-yield volumes were actually up 7%

year-on-year.

“The first few weeks of 2018 were really a

seller’s market - you could bring almost anything

at any time,” said Haitham Ghattas, head of debt

origination for Asia at Deutsche Bank.

“What we saw in late first quarter and early

second was a market of windows, with a flurry of

activity backing up secondary levels and leading