Emerging debt-Asian bond spreads widen; Hynix dips on ratings

HONG KONG, Aug 5 (Reuters) - Asian bond spreads widened on
Tuesday as a slump in oil prices to three-month lows sparked
concerns over a weaker global economy, with caution also in
place ahead of the Federal Reserve's meeting later in the day.

The iTRAXX Asia ex-Japan high-yield index ITAIG5Y=IE, a
key measure of risk aversion, widened by about 10-15 basis
points (bps) to 550 bps, while the equivalent investment-grade
index ITAIG5UA=GFI widened by 4-5 bps to around 140.

Regional spreads have steadily widened since late May as a
credit crunch continues to haunt the global financial sector a
year after problems surfaced, while signs of a slowing global
economy have further intensified risk aversion.

Still, spreads are far off record levels. The iTRAXX
high-yield index is well below the record above 650 in
mid-March in the run-up to the rescue of U.S. investment bank
Bear Stearns.

"Mounting evidence of moderating economic growth is
squeezing the speculative premia out of commodities," said
Brett Williams, a credit analyst at BNP Paribas in an email to
clients.

Oil prices CLc1 fell $1.12 to $120.29 a barrel as of 0541
GMT, after already slumping $3.69 in New York trade on Monday
in a session that saw crude fall as low as a three-month low of
$119.50 at one point.

The slump comes amid signs OPEC oil supply rose for a third
consecutive month in July due to higher output from the world's
top exporter Saudi Arabia, according to a Reuters survey on
Monday. [ID:nL4265128]

Though slumping oil prices can ease concerns about
inflation, they can also be interpreted as a symptom of a
slowing global economy, which analysts said explained the 1.8
percent slump on Tuesday in the MSCI index of Asian stocks
outside Japan. .MIAPJ0000PUS

Investors also remain cautious ahead of the Fed's meeting
on Tuesday. Though no changes to current U.S. interest rates of
2 percent are expected, investor will likely focus on the
statement for insights into the thinking at the U.S. central
bank. [ID:nN03323846]

HYNIX, HOPSON FALL

The cost of protection against a default in Indonesia's
debt widened, with five-year credit default swaps (CDS)
INDONE5UA=GFI out by 3 basis points to 245, just ahead of a
central bank meeting that is expected to result in a 25 bps
hike in interest rates to 9 percent. [ID:nJAK206680]

Philippines' five-year CDS widened by about 10 basis points
to 234 PHILP5UA=GFI after data showed on Tuesday annual
inflation hit a near 17-year high of 12.2 percent in July,
above central bank and market expectations. [ID:nMAN190881]

Debt from Chinese property firms were among the decliners
in cash bonds as investors bet on a deteriorating outlook due
to the costs associated with investment projects in the sector.

Hopson Development Holdings' (0754.HK) 2012 bonds
440270AA4=RRPS were quoted at 57/52 cents to the dollar,
extending a decline after Moody's changed on Friday its outlook
on the firm's Ba3 rating to negative from stable.

Elsewhere, Hynix Semiconductor Inc's (000660.KS) 2012 bonds
KR033566514= weakened slightly to 89/90 cents to the dollar
after Moody's changed its outlook on the South Korean chip
maker's Ba2 rating to negative from stable due to weakening
liquidity and operating performance. [ID:nWLA7543]
(For list of upcoming debt issuance from Asia see [EUB/ASIA]

FIVE-YEAR CREDIT DEFAULT SWAPS

Bid/Ask spread

Current Week ago
Korea Dev Bank ~/140 ~/140
Hutchison 112/120 110/121
PCCW-HKT 158/182 135/175
China 57/~ 54/61
Indonesia 245/~ ~/250
Korea 95/105 ~/92
Malaysia 105/115 95/110
Philippines 236/~ 225/234

~no bid or ask spread
For CDS prices double click on GFICDS

ASIAN BENCHMARK DOLLAR BONDS

Coupon Maturity Bid price Bid
spread

5-YEAR

------

DBS Bank 7.13 15-May-11 106.03 153

Malaysia 7.50 15-Jul-11 108.38 119

ICICI Bank 5.75 12-Jan-12 94.45 437

Petronas 7.00 22-May-12 108.02 142

Hutchison 6.50 13-Feb-13 101.38 290

Chartered Semi 6.25 4-Apr-13 96.23 376

Korea 4.25 1-Jun-13 97.31 143

United Overseas 4.50 2-Jul-13 94.99 223

PCCW-HKT 6.00 15-Jul-13 101.18 228

China 4.75 29-Oct-13 100.23 125

10-YEAR

-------

Hutchison 6.25 24-Jan-14 101.98 331

Korea 4.88 22-Sep-14 99.50 100

PCCW-HKT 5.25 20-Jul-15 88.72 338

Woori Bank 6.13 3-May-16 96.98 266

Penerbangan 5.63 15-Mar-16 105.51 82

Philippines 8.75 7-Oct-16 113.75 258

Indonesia 6.88 9-Mar-17 99.50 298

ICICI Bank 6.38 30-Apr-22 84.61 395

Petronas 7.88 22-May-22 120.22 176
(Reporting by Rafael Nam; Editing by Jacqueline Wong)