Weekly Market Review April 27th 2021 - Investfunds
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Weekly Market Review
April 27th 2021
Highlights:
• The most significant change to the US Treasury Yield Curve occurred in 1Y tenor with a respective
value of 1bps.
• The weakest EM country currency relative to the US dollar is TRY, with -3.71% performance.
• The strongest EM country currency relative to the US dollar is BRL, with + 2.07% performance.
• The country with the highest default probability based on 5Y CDS is Argentina, with a respective
value of 72.6%.
• The most considerable year-to-date change in default probability based on 5Y CDS is 20p.p. in
Argentina.
News:
• China Huarong AMC - In early April, investors panicked on worries of debt restructuring, leading
to a sharp spike in offshore bonds from China Huarong AMC and its subsidiaries. Investors were
relieved in the second half of April as the company paid its local bonds on time. It is also expected to
pay its Hong Kong-listed bonds by the deadline. The China Banking and Insurance Regulatory
Commission indicated that the company has sufficient liquidity, and operations remain normal. China
Huarong AMC share trading has been halted since the end of March, following the delayed
announcement of annual results for 2020. It was priced at HKD 1.02 as of March 31st, 2021.In its
latest updates the company said its auditors needed more time, indicating a breach in the current April
30th 2021 deadline to publish its year 2020 annual financial performance.
• American Airlines – In Q1, the company posted a USD 1.25 billion loss. Revenue declined by 53%
to USD 4.4 billion. Cost-cutting measures were taken, saving USD 1.3 billion. The company
witnessed a recovery in air traveller numbers but these were still below pre-pandemic levels. 5-Year
and 8-Year bonds traded plat at 4.12% and 4.59%, respectively.
• Alpha Holding – Fitch rating has downgraded short-term foreign and local currency ratings to CC
from B in consideration of accounting errors and flawed financial statements for the year
2018,2019,2020. The Mexican financial company relies majorly on debt issuances, with a bullet
payment of market debt due by year-end 2022.
• Nippon Life Insurance - Japan’s largest private life insurer with a total AUM of 71.4 trillion yen
(USD 661.6 billion), plans to increase the exposure of yen fixed-income assets by more than 1 trillion
yen in the current financial year. It is also expecting to reduce its foreign bonds without a currency
hedge. Nippon Life Insurance 15-Year USD bonds are trading between 2.3- and 2.38%.
© Cbonds.com | Weekly Market ReportLargest High Yield Issues
Amount, Issuer Rating End of
Issue Country
mln USD M/S/F Placement
Central China Real Estate,
China 400 B1/B+/BB- 19.04.2021
6.875% 8aug2022, USD
Alfa-Bank, FRN 26oct2031,
Russia 350 Ba1/BB+/BBB- 19.04.2021
USD
Geopark, 5.5% 17jan2027, USD Chile 500 –/B+/B+ 20.04.2021
Kaisa Group Holdings, 9.75%
China 700 B2/B/B 20.04.2021
28sep2023, USD
ADLER Group S.A., 2.25%
Germany 605 Ba2/BB/– 20.04.2021
27apr2027, EUR
Pakuwon Jati, 4.875%
Indonesia 300 Ba2/BB/BB 22.04.2021
29apr2028, USD
Mytilineos, 2.25% 30oct2026,
Greece 605 –/BB-/BB 22.04.2021
EUR
goeasy, 4.375% 1may2026, USD Canada 320 Ba3/BB-/– 22.04.2021
Oriflame Investment Holding,
Switzerland 302 B1/B+/B+ 22.04.2021
5.125% 4may2026, USD
Oriflame Investment Holding,
Switzerland 300 B1/B+/B+ 22.04.2021
FRN 4may2026, EUR
*High yield placements included with an outstanding amount of more than $200 million, taking place between 19.04.2021 and
23.04.2021
Sovereign Rating Сhanges on April 19-23
New Old
Country Date
Rating Outlook Rating Outlook
Papua New Guinea B2 Negative B2 Stable 19-04-2021
Fiji Islands B1 Negative Ba3 Negative 20-04-2021
Taiwan AA Positive AA- Stable 22-04-2021
© Cbonds.com | Weekly Market ReportCbonds Country Sovereign Eurobonds Indices
Eurobond sovereign indices measure T-spread, total yield, and other indicators for the major issuing
countries. They are calculated once every trading day (at close).
© Cbonds.com | Weekly Market ReportMarket Indices & US Treasury Yield Curve
UST 2Y UST 10Y DOW NASDAQ
S&P500 SOFR
YTM YTM JONES COMPOSITE
Last value 0.16 1.58 34043.49 4180.17 14016.81 0.01
Change 0.00% -0.63% -0.46% -0.13% -0.25% 0.00%
*The change for all indices except SOFR is calculated as a difference between values at 16.04.2021 and 23.04.2021. For SOFR the
change is calculated as the difference between values at 16.04.2021 and 22.04.2021.
US stocks edged lower on worries of a US presidential tax hike, as the rate could be increased to 43.4%. The
Dow Jones and S&P 500 indexes closed lower, WoW declined by 0.46% and 0.13%, respectively.
The US treasury yield curve largely remained unchanged with only 1-2 bps weekly movement. Strong
Markit PMI data and home sales for March also weighed on yield movements.
© Cbonds.com | Weekly Market ReportCurrency Rate Indices
Currency rate indices track US dollar dynamics relative to foreign currencies. They are calculated once every
trading day (at close).
© Cbonds.com | Weekly Market ReportICE and Interactive Default Probability Indices
Default probability indices assess the risks on the Sovereign debt market for the respective country. They are
calculated based on CDS for terms of between 3 months and 30 years and calculated once every trading day
(at close).
© Cbonds.com | Weekly Market ReportWeekly Knowledge Hub:
Collective Bonds
Collective Bonds are a type of bond that has two or more issuers.
Characteristics:
• Issuers of Collective Bonds can be either enterprises or municipalities;
• If the bond issuers are municipalities, the Ministry of Finance can combine issues and place securities as
debt obligations of the Ministry of Finance, which, for example, occurs in China;
• If the bond issuers are participants in the corporate sector, they are mainly medium and small enterprises
that are close in their field of activity;
• The shares of liabilities of different issuers in the total amount of debt, as well as the credit ratings of each
of the issuers, may differ.
Advantages:
• The increased number of bond issuers contributes to risk diversification;
• The ability to jointly issue Collective Bonds allows small issuers to issue bonds.
Disadvantages:
• Rather high requirements for the credit quality of borrowers who want to participate in the bond issue;
• Failure to repay the debt by one of the issuers leads to the default of the entire issue.
Examples of Collective Bonds include the issue of municipalities Hebei, Shanxi, Heilongjiang, Henan,
Chongqing, Yunnan, Shaanxi, as well as the issue of corporate issuers Adani Green Energy, Prayatna
Developers Private Limited, Parampujya Solar Energy Private Limited.
Read more about bond types in the Cbonds glossary
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• EM and HY international placements.
Contact details:
Dmitrii Larionov, Specialist of the International Debt Markets Department,
d.larionov@cbonds.info
Paresh Nemade, India Representative,
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