November 24, 2017 / 8:57 AM / a year ago

ASIA CREDIT CLOSE: Asian credits barely changed, as tone remains weak

HONG KONG, Nov 24 (IFR) - Asian credit markets were barely changed on Friday as investors took a breather from the corrections of the past few weeks.

The iTraxx Asia ex-Japan investment-grade index was 1.6bp tighter at 75bp/76bp.

“The market was very quiet towards the week’s end with most of the names flat or just range-bound within 1bp-3bp,” said a Hong Kong-based trader.

The trader said the tone of the market remained weak and expected to see some additional corrections in the near future, especially on the long-date bonds, like Chinese banks AT1s and Chinese banks’ senior notes.

“Valuations are too tight,” he said, adding that effects of fresh Chinese government steps to revamp the massive asset-management industry to curb financial risks may eventually spread to offshore US dollar bonds.

Postal Savings Bank of China’s 4.5% AT1s have fallen 1.4 points this month and were bid at 98.85.

Qingdao City Construction Investment’s new dual-tranche US dollar bonds were 1bp-2bp wider as investors took profit after Thursday’s gains.

Union Bank of the Philippines’ 3.369% 2022s were quoted at 99.947/100.123. On Friday, the lender tapped the 2022s for US$100m at par to increase the total outstanding to US$500m.

In the high yield segment, Chinese coal producer Yankuang Group’s newly priced 4.75% US$400m 3-year bonds traded up to 99.50, from reoffer of 99.311.

HNA Group’s dollar bonds saw some selling pressure on reports that some lenders rejected its request for extension of one of its loans.

The Chinese conglomerate’s 363-days 8.875% notes, priced earlier this month, were traded below par and were quoted at 98.75/99.50, according to Tradeweb prices.

Reporting by Carol Chan; Editing by Dharsan Singh

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