October 7, 2016 / 9:31 AM / a year ago

ASIA CREDIT CLOSE: JD.com's bonds jump after Wal-Mart raises stake

HONG KONG, Oct 7 (IFR) - JD.com’s bonds jumped this week after Wal-Mart Stores raised its passive stake in the company to 10.8%, rescuing them from a poor secondary performance after the Chinese e-commerce company priced the notes in April.

The US$500m 3.125% 2021s and US$500m 3.875% 2026s tightened about 5bp-7bp this week, driving the bonds close to the respective T+190bp and T+220bp level they priced at.

Both tranches were battered in the aftermarket after Nomura and Fitch Ratings published reports saying China’s largest direct sales online retailer did not have an investment-grade credit profile due to its low profits and weak cash generation.

The bonds were rated Baa3/BBB- (Moody‘s/S&P), on par with the issuer.

Spreads on JD.com’s 10-year tranche blew out more than 40bp after pricing, while the 5-year notes over 25bp wider. Recently the bonds have been steadily tightening, thanks to a global bid for emerging-markets bonds.

Elsewhere in Asian credit, a Singapore-based trader said strong bidding was spotted in the short-end of curves as investors were seen shorting duration.

On the sovereign front, Vietnam’s US$1bn 4.8% 2024s dropped about a third of a point in the past two days to yield around 3.92%, while Indonesia’s US$2.25bn 4.75% 2026s dropped by a similar amount to 110.86/111.12, according to Tradeweb.

Reporting by Frances Yoon; Editing by Vincent Baby

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