SINGAPORE, Sept 7 (IFR) - Asian credits held steady today as
prospects of a US rate increase faded on weaker than expected
ISM services data.
Credit spreads tightened 3bp earlier in the day but lost
some gains to 2bp tighter in the afternoon as the iTraxx Asia IG
index held at 107bp/108bp.
High-yield bonds were firmer across the spectrum.
"It is hard to read the market valuation-wise but fund flows
continue to be strong," said one high-yield trader. "There were
concerns of indigestion in recent supplies but the bonds are
faring well so I think there is still room for more HY deals."
A case in point was China South City Holdings, which
received a lacklustre reception to its 5 non-call 3 bonds
yesterday. The notes, priced at 98.960, were half a point higher
today with indications at around 99.50.
One factor in favour of the secondary markets is that a
number of recent HY deals were for refinancing purposes, which
means that new deals are not soaking up extra funds.
These deals included Road King's 5NC3 notes that priced at
par. The bonds edged higher to a touch under par, after dipping
Glorious Property's bonds were steady despite press reports
that it had missed a coupon payment on its 13.25% due 2018.
Subsequent reports said the Chinese property company was
arranging funds to pay within a 30-day grace period.
The notes were grinding tighter slowly, with quotes for the
2018s ranging between 89.00 and 91.00.
(Reporting by Kit Yin Boey; Editing by Vincent Baby)