September was a very busy month in primary markets with record issuance seen in USD along with heavy issuance in EUR and GBP even as Sovereign yields rose markedly over the month.
The US 10-year reached 1.50% and the 10 year Gilt a mighty 1% as inflation worries took hold. There was a (remarkably) brief hiatus in new issuance with some deals pulled as the Chinese property developer Evergrande began to be unable to honour its debt obligations, swiftly followed by several other similar Chinese property companies. Most of their debt is onshore but there is offshore USD exposure and the usual suspects hold it, the biggest holders being HY ETF related.
It was a busy month too for CHIG. We don’t often hold bonds to maturity unless they have a coupon reset but we did see maturities from Goldman Sachs and RBC FRN’s. We part rolled proceeds from these into the inaugural Sterling covered floating issue from United Overseas Bank, the Singaporean entity paying SONIA + 100bp and topped up an existing floater from Bank of Nova Scotia. In other financials, the T2 subordinated bank capital area saw several new issues and we took the new Nordea Bank and Investec issues, both with similar 5-year call structures, switching out of existing T2 holdings from Lloyds and Credit Agricole.