October 17, 2016 / 9:31 AM / 10 months ago

ASIA CREDIT CLOSE: Credit rallies, despite expectations of heavy supply

SINGAPORE, Oct 17 (IFR) - There was a burst of primary activity today, as issuers tried to come to market ahead of the expected US$10bn-plus sovereign offering from Saudi Arabia around mid-week.

Even with that potential supply weighing on emerging markets, credit rallied.

The Asia ex-Japan investment-grade iTraxx index was 2bp wider at 118bp/119bp, but cash bonds traded better.

CK Hutchison's dollar notes tightened, as stablemate Cheung Kong Property mandated for a proposed offering of Reg S bonds. Its 2021s and 2026s both narrowed 1bp to Treasuries plus 90bp and 125bp, respectively.

That meant its 5-year notes were flat to the initial offer price and its 10-year paper was 5bp tighter.

China National Bluestar's 2019s tightened 3bp today to Treasuries plus 176bp, a strong performance after the notes originally priced at 230bp.

Its 2021s were at 194bp, 3bp tighter today and a massive 51bp improvement since being issued.

China Cinda Asset Management's AT1s were still underwater at 99.5 bid, but that was a recovery from a low of 98.6 at the end of September.

In high yield, Chinese developer Country Garden's 2023s edged down a quarter of a point to 96.5, down two points in less than a month.

Reporting by Daniel Stanton

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