SINGAPORE, April 29 (IFR) - Credit markets in the region were holding up against a barrage of new issues. Spreads and CDS for the most-traded names in the investment-grade segment were all either unchanged or a couple of basis points tighter.
One trader, however, attributed the apparent resilience to higher US Treasury yields, which compressed spreads, despite cash prices either slipped slightly or remaining unchanged.
The yield on the 10-year US Treasuries rose 3.8bp yesterday after stronger-than-expected housing data renewed investor hopes that the US recovery is in healthy shape.
The market is feeling better, but that is really because of Treasury yields," said the trader.
That helped the new bonds of State Grid perform well in secondary, though the general perception that the issue offered a decent concession also supported the deal.
The new 5-year bonds rallied 4bp to close at 117bp/115bp, while the 10-year was quoted at 152bp mid-market, 3bp inside reoffer. The 2044s were the only one of the three bonds underperforming as they were wrapped around 147bp/144bp, having priced at 145bp.
The new 5-year bonds of Korea Land and House Financing were 2bp tighter, quoted at 148bp, and the bellwether of recent Korean issuance, Woori's Basel III-compliant subordinated bonds, closed the session 2bp tighter at 218bp/216bp, still wide to reoffer of 207bp.
The new bonds of Thailand's Ratchaburi were quoted at 167bp at the close, 8bp tight to the reoffer of 175bp. The bonds had a second rally when London came in as they had been unable to breach the 171bp mark during Asian hours.
On the high-yield front, Evergrande was leading the pack lower with its 2018s last quoted at 91.75. The company was downgraded today to BB- from BB by Standard & Poor's.
One trader said that accounts seemed to have been expecting that as the bonds dropped over USD2 in price in the past week. They moved another 50 cents lower today, though the wider property space was unchanged to 25 cents weaker.