October 30, 2017 / 9:04 AM / a year ago

ASIA CREDIT CLOSE: Asian credits weak; China US$ sovereign bonds wider

HONG KONG, Oct 30 (IFR) - Asian credits were weak on Monday as China’s US$2bn US dollar sovereign bonds, priced last Thursday, traded slightly wider after a sharp rally last Friday.

The sovereign’s 2.125% 2022s and 2.625% 2027s both traded about 2bp wider from Friday’s close, and were bid at respective ranges of 13bp-15bp and 16bp-18bp on Monday, according to a Hong Kong-based trader.

Even at those level, they were still tighter than their respective reoffer spreads of Treasuries plus 15bp and 25bp.

The prices of the bonds of Chinese SOEs, such as Sinopec and State Grid, moved in line with the general market to widen by 1bp-2bp.

The iTraxx Asia investment-grade index was 0.5bp wider at 74.9bp/75.4bp, while China’s sovereign 5-year CDS were quoted marginally tighter at 49.2bp/50.2bp.

The trader noted that Korean credits were outperforming the market and continued to trade tighter of late. He noted that the Export-Import Bank of Korea’s long-dated bonds were 2bp-3bp tighter.

China Jinmao’s 4.0% senior perpetuals, which priced in June, saw some buying flow and were hovering at around par, according to the trader.

The Chinese property developer is marketing new subordinated perpetual non-call 6 securities at initial price guidance in the 5% area today.

In the high-yield segment, Chinese corporate names in general fell 0.125-0.25 points in term of cash prices.

In a report today, Moody’s said refinancing risks of the Asian high-yield bond market remained manageable, despite a record level of issuance this year.

Reporting by Carol Chan; Editing by Dharsan Singh

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