January 31, 2018 / 8:41 AM / 10 months ago

ASIA CREDIT CLOSE: Asian credits widen marginally in soft markets

SINGAPORE, Jan 31 (IFR) - Asian credits were slightly wider on the back of weak equity markets in the region.

“There are two-way flows in the credit markets but volumes are not as active as there is a pause in primary supplies of bonds and players are cautious ahead of the US FOMC meeting later today,” said a Hong Kong-based trader.

Supply in the primary market is expected to thin out as Asian markets count the days to the Lunar New Year holidays in mid-February, when several markets will be closed for a few days.

Recently priced transactions were trading around reoffer levels, discouraging potential issuers to launch deals in the Asian market.

Yes Bank’s 3.75% 2023s were a touch wider at around 132bp over US Treasuries, after tightening 2bp-3bp when the notes were free to trade a day after pricing at 130bp on Monday.

Similarly, Exim India’s 3.875% 2028s were around reoffer levels of 125bp.

High-yield credits were a touch weaker, in line with the broader soft market tone.

Tsinghua’s bonds however bucked the trend, with the 4.75% 2021s indicated at 99.25/99.50, up from reoffer of 98.969. The 6.5% 2028s were at 99.50/99.75, up from reoffer levels of 97.32.

Noble Group’s senior bonds held steady with the 8.75% 2022s quoted at cash prices of 56/57, after gaining 7 points yesterday.

But holders of the 6% perpetual notes indicated strong opposition to the restructuring plans, thus putting more pressure on the notes to a cash price quote of 5.00/8.00.

Asian credit spreads were stable with the iTraxx Asia ex-Japan investment-grade index seen at 65bp/66bp, around 2bp tighter than yesterday’s close.

Reporting by Kit Yin Boey; Editing by Vincent Baby

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