(Corrects ownership of Berau Coal in 7th paragraph.)
HONG KONG, Aug 12 (IFR) - Asian credits remained in better
tone today after yesterday's rebound in secondary trading. In
the absence of unsettling news from the Ukrainian front, decent
performance results from Chinese listed companies helped
sentiment during a light session.
In fact, Chinese credits shone with both investment-grade
and high-yield names tightening 2bp-5bp today. Major SOEs, such
as CNOOC, State Grid and Sinopec, were pursued, while Chioli and
Greenland were also favoured.
Sinopec's 4.375% 2024s were firmer at 3.908%/3.843% today
from 3.919% yesterday. Country Garden's 7.25% 2021s strengthened
today to yield 7.49%/7.393% from 7.558% yesterday. Wanda
Properties' 2018s were better at 4.533%/4.451% from 4.67%.
In general, high-yield Chinese property credits were also
well supported with more provinces and cities relaxing bans on
non-first-time house purchases.
On the new issue side, Hai Chao Trading is still marketing a
USD300m offering of 3-year Reg S floating-rate notes at a yield
of 170bp area over 3-month Libor announced last Friday. The
order book remained open today, with the Standard Chartered
Bank-led issue expected to price tomorrow.
Also in the market is Berau Coal Energy, which continued to
build books today for its offering of 5-year non-call 3 bonds
indicated to yield in the area of 10.5%.
"Investors want to take more time as credit markets have
been volatile," said a banker on the Berau Coal deal. Others
spoke of their concerns over the company's weak corporate
governance record after Berau's London-listed parent Bumi PLC
reported unexplained expenses last year. Bumi PLC has since been
renamed Asia Resource Minerals.
The Berau 7.25% 2017s, a major comp for pricing, was trading
at 94/95 on a cash-price basis, which equates to a yield of
9.7%. Fair value would be around the 10.4% area, considering
that the curve differential between a 3-year and 5-year is
Indonesia's 2044s were little changed at 5.538%/5.507% today
from 5.551% yesterday. Pertamina's 2044s widened slightly to
yield 6.346%/6.31% from 6.336%.
Indian bonds were mixed today. Bharti Airtel's 2024s
strengthened to yield 4.783%/4.69% today from4.661% yesterday.
ONGC's 4.625% 2024s were quoted at 4.752%/4.679% from 4.751%.
IDBI's 5% 2019s were quoted at 4.299%/4.153% from 4.379%