May 25, 2017 / 9:09 AM / 8 months ago

ASIA CREDIT CLOSE: Active flows seen, but China downgrade brushed aside

SINGAPORE, May 25 (IFR) - The iTraxx Asia ex-Japan investment-grade index was flat at around 90bp/91bp today, but there were active flows after US Treasury yields fell overnight.

“People are taking the opportunity to sell across the board - anything new or trading at a high cash price,” said a credit trader.

“It’s nothing too cynical and it’s not panic-selling. Even without the China downgrade, people would be selling because yields went lower.”

Even after Moody’s cut China’s rating to A1, from Aa3, the sovereign’s 5-year CDS was seen at a mid-price of 79bp today, around where it had traded all week, and lower than its level of 82bp a week ago.

ChemChina’s new perpetual non-call 5 bonds were seen at a cash price of 100.6, having priced at par.

Beijing Gas’s new 2022 bonds were seen at a Treasury spread of 122bp today, having widened from an issue spread of 116bp.

In high yield, Logan Property’s new 2023 bonds callable in 2020 dropped half a point to a cash price of 96.5, having been issued at 98.773.

Indonesia’s 2022 dollar bonds tightened 1bp to Treasuries plus 135bp as it continued to market a multi-tranche Samurai bond offering.

Reporting by Daniel Stanton; Editing by Vincent Baby

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