HONG KONG, Jan 15 (IFR) - Asian credits were trading on a softer note on Tuesday, with volatility seen in the Chinese property bonds due to the flood of new deals from the sector.
The Asia iTraxx IG index was slightly wider at 106.50bp/108.50bp compared with around 106bp yesterday.
After a quiet Monday, three property deals were unleashed today, two of which launched price talk - KWG Property perpetuals and Fantasia’s 7NC4 bonds.
The new round of property paper supply pulled Agile’s perps down again, after they had rebounded around a point this morning following the sell-off yesterday.
Agile’s perps were dragged down to 97 after climbing to 98 this morning, as some traders felt it was oversold.
“The market is running away from where there is liquidity,” said a Singapore-based high yield trader. “A couple of weeks ago, everyone was piling into single B names because there was tonnes of issuance in BBs, now you are going to see a complete reverse happening.”
Li & Fung’s perps were also weak and were quoted about 0.25pts lower this morning after S&P putting them on negative watch
“We placed the ratings on CreditWatch because Li & Fung’s recent profit warning suggests that its operating results for 2012 could be materially weaker than our base-case scenario, under which we revised the rating outlook on the company to negative from stable in November 2012,” S&P said.