The Dutch pension asset manager's Asia Pacific head of real estate says his team has just had one of its busiest years ever and that 2021 is looking similarly promising.
The S$100 million ($73 million) five-year programme is structured as a first-to-default basket linked to sovereign bonds from China, Thailand, Korea and Malaysia, and quasi-sovereign bonds sold by the State Bank of India. The Emerging Asia Retail Notes are issued by Societe Generale and distributed solely by Standard Chartered.
All of the names referenced in the basket are investment grade. China, Korea and Malaysia are all single-A credits, while the State Bank of India and Thailand are rated triple-B.
Investors earn a semi-annual coupon of 3.3% so long as none of the names suffers a credit event, such as bankruptcy or a failure to pay creditors. The total return after five years will be 16.5% û an attractive yield, given the credit quality of the basket and the low rate of default in Asia, that reflects the decent spreads available on Asian credits despite significant tightening in the past couple of months.
Spreads on the main iTraxx index of investment-grade names spiked to 160bp in mid-March but have since settled back to the 70bp mark, which is roughly where they started the year but still much more generous than a year ago.
"It took a bit of time for investors to digest everything that has happened but in the last few weeks we have seen requests from investors coming back in structured credit," says Francois de-Supervielle, head of structured credit at Societe Generale Corporate & Investment Banking in Hong Kong. "It's still a difficult market right now but it's starting to get better."
The notes are intended to be held to maturity and are not listed on any exchange. Investors can sell the notes back to SocGen but there is no guarantee of an active market û it will quote a bid price at the start of each month on a "best efforts" basis, which is to say that it is not obliged to buy back the notes even at its quoted bid price.
SocGen can call the bonds at 103% of the principal amount (plus the accrued coupon) every six months.
The notes are due to be issued on June 30 and have a minimum investment amount of S$5,000. Allen & Gledhill advised on legal issues relating to the notes.
Record low borrowing costs in Australia are feeding demand for the country's real estate, with domestic and global investors raising their allocations into the sector.
Experts have a diversified view on the appeal of private assets across the region, but one thing's for certain - inflows are rising, particularly into China and the US.
Malaysia's Armed Forces Fund hires new CEO; Canada's Omers appoints Asia capital markets managing director; HSBC Asset Management creates alternatives unit, appoints CIO as its head; Bank of Singapore names global wealth head; Aware Super hires IFA head; Hong Kong names acting head for MPFA; Schroders adding to Asia ESG headcount; and more.
Asian fixed income assets – including Hong Kong dollar (HKD) bonds – are luring growing numbers of global investors who are striving for reliable and consistent returns amid macro uncertainty compounded by rising inflation and rates, according to HSBC Asset Management.