ASIA CREDIT CLOSE: New issues dominate market, sovereigns rally

Wed Feb 19, 2014 4:19am EST

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HONG KONG, Feb 19 (IFR) - The secondary market was all about new issues today with Sun Hung Kai's newly priced bonds taking the limelight.

The Hong Kong property company priced 10-year non-call five paper to yield 205bp over US Treasuries last night and the offering quickly tightened to a spread of 191bp today.

Traders said the bonds were priced fairly and that demand was so strong buyers were out in force.

"I think the bonds were fairly placed out and there were not too many flippers," said one Singapore-based trader.

With the markets focused on the hectic primary supply, including at least three US dollar bonds that launched today, the secondary markets were quiet.

An expected supply out of China, meanwhile, pushed out spreads on China credits. Yields on CNOOC and CNPC widened about 3bp. Wanda 2024s were trading to yield spreads of 455bp/445bp.

"Sovereign paper was especially active these two days," said a high- grade trader. "It was a matter of active short-covering and all the sovereigns went crazy."

Philippines 2024s were about half a point higher today while the long-end paper pushed up 1 point. Indonesia's short-dated and long-end bonds increased half a point as investors pushed to buy into emerging market bonds.

On the high yield side, Agile 2019s were said to be trading at 100.38./100.88, Yuzhou 2019s were at 97.25/98.00 and China South 2019s were at 99.25/100.00.

Credit default spreads were fairly flat with the iTraxx Asia IG index at 132bp/134bp.

KitYin.boey@thomsonreuters.com

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