US consumer confidence dropped for a third consecutive month to a seven month low of 109.3 in September from 115.2 in August and lower than economist expectations of 115. Bloomberg suggests that concerns over the delta variant and higher prices dampened sentiment. Besides, the Richmond Fed Manufacturing Index also came lower at -3 vs. 9 in the previous month, the first negative reading since June 2020 at the peak of the pandemic.
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Chengdu Xingcheng Investment raised $300mn via a 5Y green bond at a yield of 2.375%, 37.5bp inside initial guidance of 2.75% area. The bonds have expected ratings of BBB+ (Fitch), and received orders over $1.75bn, 5.8x issue size. Proceeds will be used for offshore refinancing to support certain eligible green projects. The issuer is wholly owned by the Chengdu SASAC. It has businesses including urban infrastructure construction and municipal development, property development, pharmaceuticals and healthcare. The new bonds are priced 35.5bp tighter to its existing 2.9% non-green 2026s that yield 2.73%.
NBN raised $2bn via a three-tranche deal. It raised:
A private placement is a sale of securities directly to select private investors, rather than issuing them via a public offering. Investors in privately placed bonds generally comprise large banks, mutual funds, or insurance companies. The advantage of private placements is that they may not be subject to the same strict regulations regarding disclosure and reporting of public offerings. Also, the cost and time savings add to its attractiveness. On the other hand, they may carry a higher rate to entice investors and they limit the number and variety of investors that can take part unlike public offerings.
Powell’s main worry was “that it would affect global financial conditions through confidence channels and that kind of thing.”
“This is an incredibly delicate and difficult period for central banks.” “As a minimum, rates markets are finally waking up to the asymmetric risk/reward that had developed over the summer months given all the global inflation in the system and the evidence that we were in a global hiking cycle.”
“The low interest-rate environment is driving demand for non-traditional fixed income investments.” “OBND seeks to meet investors’ needs for both yield and diversification while providing the benefits of active risk management.”
“The CDS market looks much more like a market should look like,” Felsenheimer said. “Bond markets rather look like a supermarket after Brexit.”
“The Evergrande crisis has been unfolding for quite some time, and I think the risks will be defused in a targeted way.” “The fallout [from power supply squeeze] is more likely to be out of control,” Yuan said.