July 10, 2014 / 9:28 AM / 3 years ago

ASIA CREDIT CLOSE: New issues trade steady in flat market

SINGAPORE, July 10 (IFR) - Asian credits were flat to steady today amid mixed results among regional equity markets.

Japanese stocks fell despite benign talk released in US Federal Reserve committee minutes. Chinese equities treaded water, while and stocks in other Asian markets rose.

Asian credit markets were reassured by the Fed's open market committee minutes released on Wednesday in the US and credit spreads were steady.

The iTraxx Asia IG index was broadly unchanged at 102bp/104bp, although with a slight bearish tone. Indonesia's 5-year CDS was stable at 142bp/147bp as exit polls in the Indonesian presidential elections showed reform-minded Joko "Jokowi" Widodo ahead by a slight margin of 3%-5% over his opponent Prabowo Subianto.

"Investors are reassured by the comfortable lead and have bought on the dip," said a sovereign trader. Indonesia's 2044s were quoted at 117.20/117.60, marginally down from yesterday's 118.00 but up from 113.00 at the start of the week.

The cash bond market would have been quieter if not for new issues that priced yesterday. China Huarong's dual-tranche deal was heavily traded. The smaller USD300m 3-year bond proved popular as under-allocated investors sought the paper in the secondary market.

Spreads on the bond, which priced at a reoffer level of 215bp over the 3-year US Treasury or an equivalent of 260bp over the 2-year Treasury, narrowed by as much as 25bp before settling at 240bp/238bp over 2-year Treasuries.

The 5-year bond was quoted at a spread of 232bp/230bp, about 5bp tighter than the reoffer spread.

DBS Group's new 144A/Reg S bonds due 2019s tightened to 54bp over Treasuries on the break, from a reoffer spread of 58bp, but settled at 57bp/56bp by late afternoon.

Other new issues were less in demand. ONGC Videsh's 2019s were indicated at a spread of 167bp/164bp, flat to yesterday's levels, while the 2024s were at 209bp/206bp, broadly unchanged from yesterday too.

India's Bank of Baroda, which re-opened its 5.5-year 4.875% bond due 2019 on Tuesday at a reoffer spread of 203bp, stayed steady at 204bp/199bp.


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