ASIA CREDIT CLOSE: New-issue strength fades, high-yield rises
SINGAPORE, Sept 13 (IFR) - Asian credit markets are wrapping up the week with a bit of indigestion as investment-grade new issues gave back some of the initial gains as the sudden rush of supply began to take its toll.
"I clearly only have one day to make money as the initial rally is gone in the second day," said one trader in Singapore.
Indeed, the new five-year bonds of PTTEP, priced on Monday at 200bp over Treasuries, were last quoted at 212bp/207bp. The new 2019s of KDB, likewise, were quoted at 146bp/144bp. They priced at 140bp on Tuesday. Kexim's new 5-year, completed on Wednesday at 127bp, was bid at 131bp.
Orient AMC's brand new 5-year bonds, which priced last night, were barely holding on to a gain on their reoffer spread of 325bp. The securities were last quoted at 317bp, but they traded as wide as 330bp at the open.
The only outperformer was the new 2019 sukuk of Indonesia, which was quoted at 101.35/101.65 after it priced at par. Investors, however, saw the deal as cheap from the outset.
The strong performance of the sovereign bond alongside the decision by Indonesia's central bank to hike rates by 25bp also helped prop up high-yield corporates from the country. Bonds from both Bhakti Investama and Indika gained about USD3 in price terms throughout the week.
New issues in the high-yield space were also offering much better return to investors. The new bonds from Sri Lanka's National Savings Bank were closing the day about USD1.75 higher in price terms.
Chinese developer CIFI Holdings' tap of its bonds due in April 2018 printed at 104.00 and were quoted at 106.50, recovering to their secondary price before the reopening of the bond was announced.
Even some of the better quality high-yield bonds gained this week. Country Garden 2023s, a common benchmark for the Chinese property sector, were trading at 95.50, some USD1.5 higher in the week.