| Bonds Online |
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| 5/10/2013Market Performance |
| Municipal Bonds |
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S&P National Bond Index
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3.00% |
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S&P California Bond Index
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2.96% |
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S&P New York Bond Index
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3.13% |
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S&P National 0-5 Year Municipal Bond Index
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0.70% |
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| S&P/BGCantor US Treasury Bond |
400.09 |
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| Income Equities: |
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| Preferred Stocks |
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S&P U.S. Preferred Stock Index
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848.03 |
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S&P U.S. Preferred Stock Index (CAD)
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636.26 |
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S&P U.S. Preferred Stock Index (TR)
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1,701.05 |
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S&P U.S. Preferred Stock Index (TR) (CAD)
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1,276.26 |
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| REITs |
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S&P REIT Index
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174.07 |
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S&P REIT Index (TR)
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425.30 |
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| MLPs |
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S&P MLP Index
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2,469.58 |
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S&P MLP Index (TR)
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5,428.50 |
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See Data
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Company Bond Investors ‘Very Bullish’ on 2010: New Issue Alert |
By John Detrixhe
Dec. 24 (Bloomberg) -- U.S. corporate borrowers are marketing at least $1.86 billion of bonds as credit investors remain “very bullish” on the outlook for debt securities in 2010, according to a Bank of America Merrill Lynch survey.
Company bond sales totaled $1.24 trillion this year, up from $873.3 billion in the same period a year ago, according to data compiled by Bloomberg. Of investment-grade bond buyers, 51 percent were “overweight” relative to their benchmarks, and 53 percent of respondents were “overweight” high-yield debt, the Bank of America Merrill Lynch survey of 106 investors showed.
Corporate bond buyers expect credit quality to improve, the first time those in the survey have predicted a “positive” trend in investment-grade issuers’ ability to repay debt since 2005, the Bank of America Merrill Lynch analysts wrote. Confidence in companies’ ability to repay their debts has risen amid signs that the economic recovery is strengthening.
“For the first time since early 2005,” purchasers of investment-grade debt that responded to the survey said they expect “positive credit-quality trends in their market,” the Bank of America Merrill Lynch analysts wrote. “The shift has been even more dramatic” in the high-yield market, they wrote.
High-yield, or junk, bonds are rated below Baa3 by Moody’s Investors Service and BBB- by Standard & Poor’s.
American consumers’ spending and incomes climbed in November, indicating the biggest part of the economy is poised to strengthen.
Home Sales Fall
Purchases rose 0.5 percent as households took advantage of discounts on autos and electronics, figures from the Commerce Department showed yesterday. The gain was smaller than forecast as unseasonably warm weather depressed utility use. Another report showed new-home sales unexpectedly fell last month as potential buyers were discouraged by the expiration of a tax credit. That tax break was later extended.
Ratings cuts by S&P on U.S. borrowers dropped each quarter this year, falling to 159 downgrades in the current three-month period from 282 in the third quarter, according to data compiled by Bloomberg.
In investment-grade credit, 12 percent of respondents in the Bank of America Merrill Lynch survey said they expected more upgrades than downgrades, compared with a year ago when almost 80 percent predicted the reverse. In high-yield debt, 28 percent of survey participants forecast an increase in credit quality, compared with almost 100 percent expecting a decline a year ago.
Ratings Upgrades
S&P upgraded 352 companies in the second half of the year, compared with 204 ratings increases in the first six months of 2009, Bloomberg data show.
Bank of America Merrill Lynch’s survey included money managers, insurance companies, hedge funds, banks and pensions, according to the report. The data was collected Dec. 8 to Dec. 18.
JPMorgan Chase & Co., the second-largest U.S. bank, sold $4 billion of 13-month extendible notes on Dec. 21, the only corporate borrower to tap the market in this holiday week.
Company bond sales this week compare with $5.27 billion of investment-grade bond sales in the similar period last week, and $4.28 billion of high-yield, high-risk bond sales, Bloomberg data show.
Corporate bond investors “said they see a potential of spread tightening going forward,” the Bank of America Merrill Lynch analysts wrote.
The extra yield that investors demand to own investment- grade bonds instead of Treasuries was unchanged yesterday at 196 basis points, the lowest level since Nov. 30, 2007, according to Merrill Lynch’s U.S. Corporate Master index. A basis point is 0.01 percentage point.
High-yield bond spreads tightened 5 basis points to 660 basis points.
Following is a description of at least $1.86 billion of pending sales of dollar-denominated bonds in the U.S.
Investment Grade
SINOCHEM CORP., China’s biggest chemicals trader, started selling $500 million of five-year dollar bonds to fund overseas acquisitions, a sale document shows. Sinochem, based in Beijing, offered an interest rate of 65 basis points to 95 basis points more than the six-month London interbank offered rate, according to the document.
(Updated Oct. 28. See {1001Z CH <Equity> CN <GO>}.)
Not Rated
SENSIENT TECHNOLOGIES CORP. said it entered into an agreement with a group of financial institutions for the issuance of $110 million in fixed-rate, senior notes, according to a Nov. 19 statement distributed by Business Wire.
(Added Nov. 20. See {SXT US <Equity> CN <GO>}.)
PT BAKRIE & BROTHERS is considering the sale of as much as $250 million of five-year bonds by January, the company said in a statement. There are no credit ratings available for the Indonesian metals producer and telecom operator, according to Bloomberg data.
(Updated Nov. 24. See {BNBR IJ <Equity> CN <GO>}.)
High Yield
BIRCH COMMUNICATIONS INC. is offering $100 million of senior secured notes due in 2015, with proceeds going toward refinancing debt, buying outstanding warrants for its common stock and general corporate purposes, including acquisitions, the Atlanta-based company said Nov. 30 in a statement. Birch is rated B- by S&P, the ratings company wrote Dec. 4 in a statement.
(Updated Dec. 21. See www.birch.com/about/)
PT CILIANDRA PERKASA, an Indonesian oil palm grower, may sell dollar bonds, a person familiar with the matter said. Ciliandra is a unit of Singapore-based First Resources Ltd.
(Added Nov. 16. See {1754889Z IJ <Equity> CN <GO>}.)
PT CHANDRA ASRI, the Indonesian petrochemical company, plans to raise as much as $250 million from the sale of five- year bonds, according to two people with knowledge of the deal. DBS Group Holdings Ltd. and Deutsche Bank AG are arranging the sale. Standard & Poor’s assigned a B+ rating to the senior secured notes, which will be issued by Chandra Asri’s wholly owned Altus Capital Ltd. unit. Moody’s assigned them a provisional rating of B2. Chandra Asri is considering the dollar bond sale to fund expansion, according to Agustino Sudjono, the corporate secretary at parent company PT Bariot Pacific.
(Updated Dec. 22 See {1104Z IJ <EQUITY> CN <GO>}.)
PT MEDCO ENERGI INTERNASIONAL plans to sell $300 million of bonds, Bisnis Indonesia reported, citing unnamed people. Indonesia’s largest publicly traded oil company, which is rated B at S&P, has invited banks to bid to manage the bond sale.
(Added Oct. 26. See {MEDC IJ <Equity> CN <GO>}.)
AO ASTANA FINANCE will offer senior creditors $350 million of new bonds, as well as recovery notes and 58.9 percent of voting shares, the lender said in a statement published through the Kazakhstan Stock Exchange. Holders of Astana Finance’s domestic notes will be offered 20-year tenge-denominated bonds with an 8 percent coupon, the lender said in the statement, which was dated Oct. 16.
(Added Oct. 20. See {ASFI KZ <Equity> CN <GO>}.)
The DOMINICAN REPUBLIC may sell as much as $600 million of bonds, said Roberto Cabanas, head of general financing at the Public Credit Office. The government hired Barclays Plc and Citigroup Inc. to arrange the country’s first international dollar bond sale in more than three years. The country is rated B2 by Moody’s and B by S&P.
(Added Oct. 9. See {TNI DOMREP NEWBON <GO>})
VIETNAM may sell its first overseas bond since 2005 in a $1 billion offering as soon as next month, according to a government official.
(Updated Dec. 3. See {EI0358982 <CORP> DES <GO>})
Offerings in Pipeline
VIETNAM SHIPBUILDING INDUSTRY GROUP, the state-owned company known as Vinashin, won government approval to sell as much as $600 million of bonds overseas to fund construction of ships. Vinashin plans to raise between $400 million and $600 million in a dollar-denominated bond sale, “hopefully within the first quarter next year and with a government guarantee,” Chief Business Officer Nguyen Quoc Anh said in a phone interview from the northern port province of Quang Ninh.
(Added Dec. 22. See {1052857Z VN <Equity> CN <GO>}.)
The POLISH government may sell dollar-denominated bonds in the first quarter of next year, PAP newswire cited Deputy Finance Minister Dominik Radziwill as saying. Poland may sell bonds denominated in euros as early as January 2010, PAP cited Radziwill as saying.
(Added Dec. 16. See {1084Z PW <Equity> CN <GO>}.)
ANGOLA, which vies with Nigeria as Africa’s biggest oil producer, is seeking to raise $4 billion from a sale of bonds. The debt will be sold in two parts in December and in June 2010, according to John Coulter, chief executive officer of JPMorgan Chase & Co.’s South African unit, which is managing the deal. Angola will seek a credit rating after the first portion is sold, Finance Minister Eduardo Severim de Morais said Dec. 14.
(Updated Dec. 15. See {NI ANGOLA BN <GO>})
MICHAELS STORES INC., the world’s largest arts-and-crafts retailer, amended its credit agreement on Aug. 21 to allow the private equity-owned company to issue bonds to repay its existing term loan under a $2.4 billion facility with Deutsche Bank AG and other lenders.
(Updated Oct. 27. See {MIK US <Equity> CN <GO>}.)
The PHILIPPINES may sell most of its $2 billion overseas bond planned for 2010 in the first quarter, before the May elections, Finance Secretary Gary Teves said. The country is rated Ba3 at Moody’s and BB- at S&P.
(Added Nov. 10. See {TNI PHIL NEWBON <GO>})
INDONESIA may sell $750 million of dollar-denominated Islamic bonds in July 2010, Dahlan Siamat, director of Islamic financing policy at the nation’s Debt Management Office, said in Jakarta on Dec. 15. The nation is rated Ba2 by Moody’s and BB-by S&P.
(Updated Dec. 15. See {TNI INDONESIA NEWBON <GO>})
ALROSA, Russia’s diamond monopoly, may sell as much as $1 billion in foreign-currency bonds in the second half of next year, RIA Novosti reported, citing Chief Executive Officer Fyodor Andreyev. The company is rated Ba3 by Moody’s.
(Added Sept. 29. See {1018Z RU <Equity> CN <GO>}.)
--With assistance from Timothy R. Homan in Washington. Editors: Mitchell Martin, Andrew Reierson
To contact the reporter on this story: John Detrixhe in New York at +1-212-617-3409 or jdetrixhe1@bloomberg.net
To contact the editor responsible for this story: Alan Goldstein at +1-212-617-6186 or agoldstein5@bloomberg.net
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