Malaysia to allow business trusts

Source: Reuters/Tim Chong Cheong, chairman of OCBC Bank Group, accompanied by Tsien, OCBC Bank Group CEO, tours the Supertree Aerial Walkway at Gardens by the Bay in Singapore Investors are finally showing some reluctance to the tighter spreads on new Asian bonds. In recent weeks, the usually aggressive pricing tactics on dollar bonds from Asia have given way to a more subdued approach, while tightly priced new issues have struggled to perform. Despite the frothy global bid for investment-grade paper in the face of low Treasury yields, recent...

AIG’s bankers were able to price a US$2bn block trade of AIA shares at a premium last week, executing a well-timed short squeeze that lifted the share price and attracted other issuers to market. The success, however, is unlikely to be replicated, even though investor interest in share placements had shown signs of rebounding in the past few weeks. The long-awaited AIA selldown hit the market last Thursday, two days after the lock-up on AIG’s 18.8% stake in AIA expired. The trade was smaller than many had expected. But it was the aggressive...

Source: Reuters/Mick Tsikas Customers use Commonwealth Bank automatic teller machines in Central Melbourne Commonwealth Bank of Australia is about to provide Australian banks with a proper gauge of how much it will cost to raise capital at home under new banking rules. The lender has launched the first Basel III-compliant Tier 1 hybrid from an Australian bank in the local market. The first impression is that it will not be cheap. No official price talk was included in the prospectus for CBA’s Perpetual Exchangeable Resaleable Listed Securities...

The S$2.35bn (US$1.89bn) order book that GuocoLand drew on a S$50m five-year bond last week is raising questions over whether or not the Singapore market is starting to overheat. The huge book is not the first in Singapore, but the scale of the oversubscription suggests the quest for yield is at risk of distorting pricing. There is no question that demand is outstripping supply in Singapore, and issuers are taking advantage of the search for yield to lock in cheap funding. In the last two weeks alone, nine deals for a combined S$1.45bn were...

Source: Reuters/Bazuki Muhammad A man smokes on a balcony near Astro TV satellite dishes installed at a residential building in Kuala Lumpur If anyone needed reminding that Malaysia’s equity markets have had a stellar year, two statistics from IFR’s Malaysia capital markets conference in Kuala Lumpur last week would have done the trick. Equity issuance year-to-date stands at around US$7.9bn, compared with US$3.9bn for the whole of 2011, and Malaysian IPOs this year have gained 17% year to date on average. “If you’re a fund manager, you look...

Source: Reuters/Jo Yong hak A woman walks past a commuter bus of KDB at its headquarters in Seoul Three of the four US dollar bonds launched in Asia in the past couple of weeks have come with a 10-year tenor – a marked shift from standard practice. The biggest surprise came last Wednesday, when Korea Development Bank elected to issue a new 10-year benchmark rather than stick to its usual modus operandi of targeting the five-year point, a better match for the policy bank’s assets. KDB’s decision shows that the burgeoning demand from investors is...

Source: Reuters/Lee Jae Won The logo of Kookmin Bank is pictured at its branch office in Seoul Kookmin Bank’s first syndicated loan in four years looks like being a tough sell, despite South Korea’s sovereign’s rating upgrade last month. The hesitant response from lenders is a reflection of the lack of appetite for longer-tenor borrowings from banks and financial institutions, especially those with reputations for hard-nosed approaches to pricing. Liquidity has shrunk significantly following the retreat of European lenders to their home markets...

Singapore borrowers are taking note of two US-dollar bonds that last provided a pair of local issuers with low coupons, quality order books and big relative savings. Even though Oversea-Chinese Banking Corp and SP Power Assets took entirely different routes, the size and composition of the books underlined investor interest in Singapore credits. OCBC’s US$1bn deal saw orders soar to US$3.6bn with fund managers making up the bulk of the order book, while SP Power garnered an order book of US$2.25bn, again half of it from fund managers. (See...

Marine services provider Ezion Holdings priced its junior perpetual securities last Wednesday at 7.8% – the highest coupon paid on a such an issue. The pricing was 20bp inside initial guidance of 8% area, thanks to a healthy response. The issue was finalised at a size of S$125m, increased from a target of S$100m. Ezion is the first high-yield issuer to print a perp, suggesting there is some market appetite for high-yield issuers with high-yield instruments. Sure enough, two days later, sister company Ezra Holdings launched a perpetual that...

Trade and Development Bank of Mongolia has mandated Bank of America Merrill Lynch and ING for a roadshow starting Monday in Asia and Europe on a potential Reg S trade. The bank, rated B1 (Moody’s), hopes to replicate the success of its US$150m three-year Reg S trade in October 2010 and managed to come at the tight end of the 8.75%−9.00% guidance pulling in a US$420m book from 74 accounts.

China Development Bank was putting the finishing touches last Friday to a Rmb10.17bn (US$1.6bn) collateralised loan obligation that is expected to reopen China’s securitisation market after a four-year drought. Five to eight more securitisations are already expected to hit the market in the second half of this year. Agricultural Bank of China, Bank of Communications, Industrial and Commercial Bank of China, China Construction Bank, Bank of China and China Merchants Bank are all working on similar transactions, while bankers expect CDB to return...

ANZ Banking Group returned to the US covered bond market last Tuesday for the first time since its inauspicious debut last November. This time, ANZ opted for a shorter-dated three-year transaction to raise US$2.25bn across two tranches. This was accompanied by an US$750m five-year senior unsecured note. All three bonds priced at historically attractive levels to local curves as joint bookrunners ANZ, Citigroup and Morgan Stanley took advantage of pent-up US investor demand after the traditional August lull. “We only had a small window to work...