HONG KONG, July 4 (IFR) - Appetite for Asian bank Tier 2 bonds diminished on expectations that Chinese banks will resume issuance in the second half of this year.
The yield on UOB’s T2s widened to 3.122% from 2.91% on June 23, this year’s tightest level, according to Thomson Reuters data.
ICBC’s 4.875% 2025s were trading near the 4.0% handle, while yields on Busan Bank’s US$250m T2s, which dropped to as low as 3.93% on June 26, another tight for the year, were spotted at 4.19%.
The slight correction comes as T2 supply of around US$2bn-$3bn is expected in the second half of this year from the big Chinese banks, according to a Bank of America Merrill Lynch report.
Chinese property bonds continued to find buyers. Fantasia’s latest US$300m five-year non-call three senior bonds recovered lost ground since pricing at the end of last month.
Tradeweb spotted the notes about three quarters of a point higher since yesterday at 99.70/100.125.
Kaisa’s new 9.375% 2024s outperformed the 2020s, 2021s and 2022s, and were quoted at 101.0/101.50 on Tradeweb.
Reporting by Frances Yoon; Editing by Vincent Baby