Wednesday, April 25 (IFR) - Asian credit spreads tightened marginally but the outcome of the US Fed meet and fresh supply kept the rally in check.
Against the overall trend, India’s rating outlook revision to negative from stable hit Indian bonds causing them to widen about 10-20bp.
ICICI’s 2020 bonds, for instance, gapped to a spread of 400bp over treasuries following the rating action.
Other sectors did not widen so much, but the bid-ask spread on their bonds opened. The 2022 bonds from Reliance Industries, for one, were quoted at 335bp/342bp over treasuries after the announcement. In the morning they were at 335bp/325bp.
“There was much more focus on CNPC bonds today since CNOOC is coming up with a fresh bond and there was some volatility there,” said a Singapore-based trader.
China’s top offshore oil producer, CNOOC is in the market with a two tranche deal that appears to offer a fair concession to rival CNPC’s bonds and to its own implied curve.
CNOOC has issued guidance of around 210bp over US Treasuries for a 10-year dollar bond and 220bp-225bp for a 30-year tranche.
The CNPC 2041 bonds were trading around 157bp over treasuries. The iTraxx series 17 index was at 162/165bp from yesterday’s 166.5bp.
Winsway bonds gave up some of yesterday’s gains Moody’s said it sees no rating impact on the company’s ratings from the planned sale of a 29.9% shareholding interest by its major shareholder to Aluminum Corporation of China Limited (Chalco).
Its 2016 bonds were steady around 92/94 cents after rallying to as high as 95 cents last morning in hopes of a ratings upgrade.
“In high yield there is a focus on property names like country Garden and Evergrande,” said a high yield trader. Country Garden’s 2018 bonds were trading at 98/99 cents.