Wednesday, March 20, 2013 (IFR) - Asia credit markets trod water for much of the day, but had a slightly more supportive tone after Europe came in looking as if the Old Continent was willing to shrug off the Cypriot parliament’s rejection of the proposed bank deposit levy.
”I expect markets to retrace much of what they have shed over the past few days and I don’t see any dark scenario emerging from the Cyprus impasse. Still, if the Cypriot banks remain closed for the rest of the week, you start to get into the Easter holiday period.
If deals are not brought because of that, then the second week of April could look messy as banks look to bring a primary pipeline that is building strongly,” said a Singapore-based syndicate head.
Credits did not recover fully, although and the iTraxx IG Index closed 1bp wider at 103bp/105bp in the context of thin flow.
Meanwhile, recent new issuance is mixed. The newly minted IDBI long 5-year is out at Treasuries plus 304bp bid off a plus 300bp reoffer, having printed, at one point, as wide as plus 305bp.
This relatively soft performance has put some repricing pressure on the India FIG curve, with the ICICI complex around 6bp wider and Axis Bank’s around 7bp wider, with the rest of India FIG off around 2bp-3bp.
The recently tapped Glorious Property due 2018s are off 25 cents at 99.75 bid, while the KWG 2020s are up 37.5 cents at a 99.00 bid and the Longfor 2019s are up 50 cents at 106.125 bid.
The sector will be tested if Single B developer Zhong An’s ongoing roadshows leads to a deal, with the kind of punchy pricing execution that prevailed in January unlikely to make a reappearance in the midst of the risk-off bias.