Following a month in which Argentina saw its 100 year bond issuance 3x oversubscribed and a yield of close to 8%, it was notable that Asian bonds saw a waning of interest this month. July 25 saw a withdrawal of three deals due to a poor pricing environment and anemic demand. The deals were for an Indian wind energy company, a Chinese leasing company and an Indonesian miner. It was suggested that the coupon on the Chinese leasing company would have been 9.5%. Otherwise this year has been a record year with over $319 bn of USD debt issued (up one third on 2016 levels).
This chill in the air is a reminder that investors can still remain selective despite a seemingly rampant risk appetite. There is an awareness that the pipeline is rich (despite the already high issuance levels) and a sense that pricing (e.g. a 9.5% yield) may indeed represent a yield too far.