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ASIA CREDIT CLOSE: Tone weaker ahead of FOMC, as Noble slumps further
June 12, 2017 / 8:58 AM / 5 months ago

ASIA CREDIT CLOSE: Tone weaker ahead of FOMC, as Noble slumps further

SINGAPORE, June 12 (IFR) - Activity was subdued in Asian credit markets today with Australia on holiday and the market expecting the US Federal Reserve to raise rates on Wednesday.

The Asia ex-Japan iTraxx investment-grade index was flat at 84.5bp/84.75bp, although the market tone was slightly weaker.

“I don’t think the rate hike is going to cause much impact on the market, but let’s see,” said a credit trader.

Fantasia’s short-dated 364-day bonds were seen at around 100.25, according to the trader, who said there had been decent two-way trading, including interest from private bank clients.

In recent investment-grade issues, GS Caltex’s 2022 bonds tightened 2bp to Treasuries plus 123bp, while Korea Water Resources’ 2022 notes were steady at 101bp.

In high yield, Noble Group’s 2022 bonds continued to slump, dropping a point to a cash price of 35.6. The bonds have dropped around 55 points since May 10.

MIE Holdings’ bonds diverged after it announced a tender for all of its 2018 notes and some of its 2019s. S&P downgraded the company’s rating to CC from CCC, saying it considered the offer a distressed exchange equivalent to an immediate default.

Its 2019s opened two points higher than Friday’s close, then drifted down to a cash price of 55, around half a point lower than they ended last week. On the other hand, its 2018s gained two points to 65.

Among recent issues, FWD’s zero-coupon perps were seen at a cash price of 71.5, down half a point today. Melco Resorts’ 2025s continued to climb, and were seen at a cash price of 101.3.

Reporting by Daniel Stanton; Editing by Vincent Baby

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