October 31, 2017 / 9:06 AM / a year ago

ASIA CREDIT CLOSE: Huarong weakens on China overload

HONG KONG, Oct 31 (IFR) - Huarong Asset Management’s credit curve widened on Tuesday after it announced a US$3.2bn new issue of US dollar-denominated five, 10, 30 and perpetual non-call five notes.

The curve was seen about 5bp-6bp wider this morning, before narrowing slightly to about 3-4bp wider in the afternoon, according to a Hong Kong based trader.

The state-owned Chinese asset manager is also marketing an eight-year Singapore dollar bond.

Huarong is taking advantage of a robust backdrop that helped quickly absorb the country’s US$2bn sovereign bond in primary last week.

However, some investors waited on the sidelines to see where China’s SOEs would settle in secondaries, after the country’s first US dollar sovereign bond since 2004 prompted massive tightening across the country’s SOE complex.

“We’re actually seeing names like China State Construction giving back some of the gains in the run-up to the sovereign bond,” said a Singapore-based trader, who said CSC’s bonds were 3bp wider.

“Investors are still analyzing what the new levels for China corporates are in secondaries, post the sovereign bond. China’s pipeline is still quite full, with the likes of China Minmetals and Huarong in the mix.”

Asia’s investment grade CDS index was 1bp wider at 77bp/76bp, according to Thomson Reuters data.

Reporting by Frances Yoon

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