Market Review

In the primary market, Bank of China, MGM China, Hebei Shunde Investment Group, and Changchun City Urban Development Investment Holding (Group) participated in the issuance of new US dollar bonds.

In the secondary market, the Chinese US dollar investment-grade bond market was relatively calm due to the US holiday. In the state-owned enterprise sector, CNOOC widened by about 7bps; in the technology sector, Lenovo and JD.com narrowed by 1-2bps; in the financial sector, the CICC Hong Kong widened by about 1bps, and the AMC sector widened slightly. The Chinese high-yield US dollar bond market is relatively quiet, Jinmao and Road King fell by 0.25pt, and Seazen and Seazen Holdings rose by about 1pt.

Bond market performance

Global bond market performance data

Figure 1. Trends of Chinese and Asian US dollar bond indices (base=100)

Figure 2. Trends of Chinese real estate and urban investment US dollar bond indices (base=100)

Figure 3. Trends in US treasury bond yields (%)

New Release

Bank of China Johannesburg Branch issued a 3-year senior unsecured bond denominated in US dollars, with an issue size of US$300 million, a ticket yield of SOFR+58bps, and a debt rating of A1/-/A.

MGM China issued a 7NC3 senior unsecured sustainable bond denominated in US dollars, with a ticket yield of 7.25%, a base size of US$500 million, and a debt rating of B1/B+/BB-.

Hebei Shunde Investment Group Co., Ltd. issued a 3-year senior unsecured note denominated in US dollars, with a ticket yield of 8.5% and a size of US$79 million.

Changchun City Urban Development Investment Holding (Group) Co., Ltd. issued a 3-year senior unsecured note denominated in US dollars, with a ticket yield of 6.8%, a size of US$230 million, and a debt rating of -/-/BBB.

Market News Summary

MGM Resorts: On June 19, MGM China announced that on June 18, 2024 (New York time), the company, BofA Securities, Inc. and Deutsche Bank Singapore Branch (as the representative of the initial buyers) reached a purchase agreement for the issuance of US$500 million principal amount of 7.125% senior notes due on June 26, 2031. The company estimates that after deducting the discount of the initial buyers and other estimated issuance expenses payable by the company, the net proceeds from the issuance of such notes will be approximately HK$3.8593 billion or US$493.1 million. The company intends to use the net proceeds from the issuance of such notes to repay some of the outstanding loans under the revolving credit facility. The company will be permitted to re-borrow such amount under the revolving credit facility.

Far East Consortium International: On June 19, Mega Wisdom Global Limited, the issuer, announced the payment of the PIK interest of US$49.7 million (cash)/US$59.6 million (PIK)/5.00% (cash)/6.00% (PIK) maturing in 2029 and secured by SINOCL 6 06/22/29 (ISIN:XS2342977324). The bond is guaranteed by Fortune Joy Ventures Limited and Far East Capital Holding Limited. The issuer announced that it plans to pay the PIK interest of US$29,820,000 during the period from June 22, 2023 to June 22, 2024 (calculated based on the PIK interest rate of 6.00% per year for the outstanding principal of US$497 million). No cash interest will be paid during the interest period. Such PIK interest will be paid on June 24, 2024, and will constitute the principal of the bond from June 22, 2024 (inclusive), increasing the outstanding principal of the bond to US$526,820,000.

- Country Garden: Country Garden Group announced that it has recently sold part of the self-owned property assets in Jinan Wanda City. The parties to the transaction have reached a "project cooperation agreement", and the parties to the transaction are not affiliated with each other, with a transaction price of 474 million yuan. The subject of this transaction is the Jinan Rongsheng Wenhua Tourism City Shibai Ge Hotel Asset and Jinan Rongsheng Wenhua Tourism City International Conference Center Asset (hereinafter referred to as "Target Assets") held by Jinan Wanda City Construction Co., Ltd., located at No. 30 building, Fengming Road 5865, Licheng District, Jinan City, and No. 31 building, Fengming Road 5865, Licheng District, Jinan City, respectively. Real estate certificate numbers: [Lu (2021) Jinan real estate right No. 0325865] and [Lu (2022) Jinan real estate right No. 0000852]. The parties to the transaction have signed a "project cooperation agreement", and Jinan Wenhua Tourism City will transfer the target assets to its wholly-owned subsidiary Jinan Rongge Hotel Management Co., Ltd., and the acquiring party will acquire the target assets held by Jinan Wenhua Tourism City through the way of acquiring 100% equity of Jinan Rongge as agreed in the agreement. After repaying taxes and mortgage-backed debt, there is no remaining funds for the extension of bond interest payment for this asset sale. This transaction does not affect the local insurance payment work and has no significant impact on the production, operation and debt-paying ability of Country Garden.

- CIFI Group: CIFI Group announced that the redemption and cancellation amount of "21XH02" is 1.231 billion yuan, and the transfer amount is 0 yuan. There is uncertainty in the redemption payment.

Company rating adjustment

New bond issuance

(Co-produced by CITIC international and Caixin, data source is Bloomberg, bond trading platform summary, and corporate announcement)