ASIA CREDIT CLOSE: Spotlight on new issues, but heavy pipeline caps gains
SINGAPORE, Sept 12 (IFR) - A rush of new issues in Asia is keeping the secondary credit markets extremely busy, but concerns over a glut of paper are also taking hold.
The focus remained on new bonds, but the fact that new offerings are being done added a dose of optimism to some credits. The entire Indian sector tightened about 10bp to 15bp today, helping credits recoup some of the losses of the past few weeks.
Reuters reported that new RBI governor Raghuram Rajan made a compelling case for India, pointing out that only modest reforms were needed to address the current slowdown/ twin deficits.
High-grade Asian paper were broadly unchanged, but some names were about 1bp-2bp wider. China credits were about 1bp wider, but trade was lethargic.
In the opposite direction, the Asia IG Index was quoted at 135bp/137bp just as London opened, about 2bp tighter from yesterday. The move partly stemmed from accounts adding protection to increased exposure to Asian bonds amid a rise in primary supply.
The string of Korean issues also took the toll on the Republic of Korea 2023s, which were quoted at 102bp over US Treasuries, widening from as low as 94bp earlier this week, but still tight to the reoffer spread of 115bp. KDB's new 2019s were at 143bp/138bp, compared with yesterday's 140bp/137bp. The bonds were printed at 140bp.
PTTEP's 2018s lost all its gains after tightening 10bp, following its print last week at 200bp, and was indicated at 205bp/202bp, just outside its reoffer spread.
"The Thai deal was priced at its curve, and it didn't come cheap," said one trader. "It goes to show that unless a deal is reasonably priced, the whole market is not screaming after any new paper especially when you know there is a lot more supplies of fresh paper out there."
More deals are expected over the next few weeks, including those from TMB Bank, Nong Hyup, GS Caltex, Woori Bank, Korea Hydro, Kexim and Meralco.
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