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ASIA CREDIT CLOSE: Qinghai Provincial Investment defies soft sentiment
July 5, 2017 / 9:10 AM / 4 months ago

ASIA CREDIT CLOSE: Qinghai Provincial Investment defies soft sentiment

SINGAPORE, July 5 (IFR) - Asian credit markets held up amid growing geopolitical risks following Tuesday’s missile test by North Korea.

“Market sentiment is a bit weak, no small thanks to geopolitical tensions and market expectations of higher rates,” said one syndicate banker.

The UN Security Council is due to meet at 1900 GMT today to discuss the North Korean intercontinental ballistic missile test after US Secretary of State Rex Tillerson called for global action.

The soft market tone sidelined a few issuers, leaving only Hindustan Petroleum and SPDB Hong Kong to test the primary market with US dollar deals today.

The new issuers will however be encouraged by the strong gains in newly priced bonds from Qinghai Provincial Investment Group, which sold US$300m of 6.4% bonds that priced at par yesterday.

The bonds rallied a point this morning, and gained further to slightly over 101.00 in the afternoon.

Other new issues were steady. Bank of China’s floating-rate notes due 2019 and 2022, priced at par, were seen at 100.00/100.06 and 99.9/100.05.

Rural Electrification’s 2027s were under water at 99.5/99.7.

Asian credit spreads were fla t to a touch wider with the iTraxx Asia IG indicated at 87bp/89bp.

Despite the missile test from its neighbour, South Korea’s five-year CDS widened just 1.8bp although South Korean corporate credits saw larger widening in a 2bp-5bp range. Kexim’s 5-year CDS pushed out by 5.6bp to 58bp/66bp.

Reporting by Kit Yin Boey; Editing by Vincent Baby

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