ASIA CREDIT CLOSE: Spreads narrow, China property bonds under pressure
HONG KONG, Jan 21 (IFR) - Asian credit spreads narrowed Tuesday as risk sentiment remained upbeat, although high-yield Chinese property bonds saw some pressure amid ongoing supply of new paper from the sector.
"There are a lot of real-money investors freeing cash for new issues," said a Hong Kong-based credit trader.
The Itraxx Asia IG index narrowed to around 141bp from yesterday's close of around 144bp.
Korean floating-rate notes widened after the new three-year issue for Kookmin Bank was announced at 105bp over three-month Libor. The KDB three-year FRNs traded wider at 64bp over three-month Libor.
The new issue from China Shipbuilding, backed with a standby letter of credit from Bank of China, weakened other similarly backed paper as the new five-year trade came at 280bp over US Treasuries.
The SBLC-backed bonds from China Merchants Land, maturing in 2018, were at 229bp over Treasuries, CSSC Capital's 2016s and Cosco Finance' 2022s also saw real-money selling.
Towngas is also marketing its new non-call five year perpetual securities at par to yield of 5% area this morning after the Greentown perps, which priced yesterday, traded at par to yield 9%.
China South City recovered to around par after some profit-taking this morning. Cifi Group's bonds were trading slightly weaker at 99.40/99.50 after pricing at 99.545 yesterday.
Overall, high-yield Chinese property bonds traded 0.25pt-0.50pt weaker today.