January 30, 2018 / 9:00 AM / 10 months ago

ASIA CREDIT CLOSE: Asian credits weak as UST yields spike

HONG KONG, Jan 30 (IFR) - Asian credits were weak on Tuesday as a spike in US Treasury yields dented market sentiment and regional stock markets also retreated from record highs.

Investment-grade credits in general widened by 3bp-4bp and high-yield paper also saw some selling pressure, a Hong Kong-based trader said.

The iTraxx Asia ex-Japan investment-grade index was 2bp wider at 64.6bp/65.4bp.

New issues priced last night were flat at their reoffer spreads.

Yes Bank’s US$600m 3.75% 5-year notes were priced at Treasuries plus 130bp, while Chinese property developer Poly Real Estate Group’s US$500m 3.95% 5-year bonds were priced at Treasuries plus 155bp.

Yango Group’s 7.50% 2020s fell 0.36 point to a bid of 97.249. The Chinese property developer yesterday marketed new 3-year bonds at 8.875% area but then decided to postpone the deal due to market volatility and unfavourable conditions.

But there were some outperformers.

Noble Group’s bonds continued to gain on its proposed debt restructuring plan. The embattled commodity trader’s 8.75% 2022s jumped around 6 points to a bid of 56.025, according to Tradeweb.

Wanda Properties’ 7.25% 2024s rose around 0.25 points to a bid of 105.375, according to Tradeweb.

A group of investors, including Tencent, Suning Commerce Group, JD.com and Sunac China, have agreed to buy a 14% stake in the commercial property arm of Dalian Wanda Group.

HNA Group’s 8.875% 2018s were little changed at 93.813/95.313, despite continuous negative news.

The airlines-to-hotels conglomerate told creditors it potentially faces a liquidity shortfall of at least Rmb15bn (US$2.4bn) in the first quarter as repayments to creditors come due, Bloomberg reported citing unnamed sources.

Reporting by Carol Chan; Editing by Vincent Baby

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