November 15, 2017 / 9:21 AM / a year ago

ASIA CREDIT CLOSE: Asian HY continues to sell off

HONG KONG, Nov 15 (IFR) - The sell-off in Asian high-yield credit continued on Wednesday as a weaker global backdrop coincided with a building pipeline of prospective high-yield issuers such as Chinese property developers.

Indika Energy’s US$575m 7NC4s, which are on review for an upgrade to Ba3/B+ (Moody’s/Fitch), dropped about a third of a point to a cash price of 98.075/98.60, while Jababeka’s 6.5% 2023s lost a point since yesterday, according to Tradeweb.

Guangzhou R&F’s US$500m long 5NC3s, which priced last week at par and have expected ratings of BB from Fitch, were spotted around 99.250, while Yango Group’s US$250m 7.5% 3-year bonds have fallen to 98.375 from pricing at par on November 9.

WTT Investment held its ground at 100.45 despite the reduced risk appetite. The Hong Kong fixed-line telecom operator received US$3.3bn in orders for a US$670m bond that benefited from rarity value.

The drop in high-yield credit prices left a tricky backdrop for peers Concord New Energy, Hong Yang Group and Xinyuan Real Estate, which are marketing high-yield deals in primary today.

The iTraxx Asia ex-Japan IG index was spotted 2bp wider at 80bp/81bp, hovering over the widest in six weeks.

Credit defaults swaps for the China sovereign and China Development Bank widened 2bp, according to Thomson Reuters data.

India’s credit default swaps tightened however, with Bank of India’s 5-year CDS narrowing 6bp, the largest gain on the day.

Reporting by Frances Yoon; Editing by Vincent Baby

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