February 23, 2018 / 8:43 AM / 3 months ago

ASIA CREDIT CLOSE-Credits firmer; leasing firms bonds see buying

HONG KONG, Feb 23 (IFR) - Asian credits were firmer on Friday as the spike in U.S. Treasury yields took a breather after St Louis Fed President James Bullard warned that a “bunch of hikes” could turn Fed policy restrictive.

Investment-grade credits in general tightened by 1bp-2bp, with long-dated bonds from the financial leasing and TMT sectors seeing strong buying interest, a Hong Kong-based trader said.

Long-dated bonds from ICBC Leasing and CCB Leasing, which were heavily sold off in the weeks preceding Lunar New Year, have tightened 8bp-9bp since the start of this week.

“The stabilisation of US Treasury yields, at least in the short-term, has boosted market sentiment,” the trader said.

The iTraxx Asia ex-Japan investment-grade index tightened marginally at 69.7bp/70.8bp.

New issues priced overnight generally traded well.

Indonesia’s US$1.25bn 3.75% 5-year Green sukuk and US$1.75bn 10-year 4.40% sukuk, both priced at par, were quoted slightly above par at 100.10.

The Green sukuk is the world’s first Islamic Green bond from a sovereign issuer.

Redco Properties’ US$300m 364-day notes, priced at par to yield 6.375%, traded up to 100.30/100.35.

Far East Horizon’s 4.375% US$200m 5-year dollar bonds, priced at 99.827 to yield 4.414%, or Treasuries plus 175bp, were hovering at reoffer.

Its Rmb630m (US$99.4m) 3-year Dim Sum bonds, priced at par to yield 4.90%, were quoted at 100.10/100.15.

Bank of East Asia’s bonds traded up slightly after the Hong Kong-based lender reported significantly improved 2017 annual results.

Nomura said BEA’s strong results demonstrated that much of its China-related woes are now behind it and that it would overweigh the bank’s 5.5% AT1s and maintain a small overweight position on its 4% T2s. (Reporting by Carol Chan; Editing by Vincent Baby)

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