ASIA CREDIT CLOSE: Credit tightens amid broad-ranging buying

Tue Feb 18, 2014 4:08am EST

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HONG KONG, Feb 18 (IFR) - Asian credit markets ended the session tighter as market sentiment improved and China-related fears subsided.

The tone changed after news that yet another trust in China was bailed out and that the Bank of Japan would continue its record monetary stimulus measures.

The result was a strong rally in credit markets with investment grade bonds tightening by up 5bp. Indonesia's long-end was about USD1 higher.

Among specific credits, Agile Property Holdings' new bonds closed up by about 25 cents, last quoted at 100.25/100.50, having priced at 99.499 last week. The new sukuk of Export Import Bank of Malaysia closed some 3bp tighter at 115bp/110bp, having priced to yield 140bp over US Treasuries.

One trader said there was a short-squeeze in five-year Chinese CDS that was coming to its peak today. The contract had been sold as wide as 107bp a couple of weeks ago and today was closing at 84bp, some 4bp tighter in the day.

"There was a bit of scare about China but the (economic) numbers have been good," said an analyst.

The move, alongside a rally in other single-name CDS contracts, helped the Asia ex-Japan iTraxx IG index tighten about 3bp to close the session quoted at 130bp-131bp, near its tightest for the year.

Christopher.Langner@thomsonreuters.com

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