ASIA CREDIT CLOSE: PBs forgive Agile for being stuffed

Tue Feb 11, 2014 4:36am EST

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SINGAPORE, Feb 11 (IFR) - The new five-year bonds of Agile Property Holdings recovered in the afternoon as private-banking accounts bought some more of the paper even though it traded down initially.

The bonds, priced at 99.499 yesterday, traded as low as 99.375 on the break this morning. "It seems like some people were trying to short it after they saw that the deal was stuffed to PBs," said one trader.

However, despite taking up 44% of the bonds, PB accounts came back for more when the paper dropped below reoffer. That saw the bond close quoted at a mid-market level of 99.85.

Still, Agile's issue was quite controversial, with bankers away from the transaction saying the company should have done a smaller transaction, and credit analysts suggesting that the 2021 bonds of the better-rated and larger Country Garden were a far better buy than the new 2019 issue.

Otherwise, the high-yield market moved very little, with a few benchmarks 15ct to 25ct higher on the day.

On the investment-grade front, the high-beta issues were 5bp to 10bp tighter on an improvement in the overall market tone.

One trader in Singapore suggested, though, that liquidity was very thin, which was helping exacerbate the move. "Dealers have very little inventory, so any trades move the market very significantly," he said.

The Asia iTraxx ex-Japan IG index, however, was also tighter today, last quoted at 139bp/141bp, having closed yesterday at a mid-market level of 142bp.

The outperformer, however, was the new five-year dollar-denominated sukuk of the Export-Import Bank of Malaysia, which priced yesterday at 140bp and was bid at 125bp at the close today.

Christopher.Langner@thomsonreuters.com

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