SINGAPORE, Jan 30 (IFR) - With newly priced perpetual securities all trading under water, it is a wonder that Philippines’ Petron Corporation launched another US dollar perpetual issue into the markets today.
While attention will swing to its performance tomorrow, assuming the deal prices tonight, Petron will have to pray hard its new notes will not go the same way that the Reliance Industries perps did, which was down - the same path that Agile and Cheung Kong perps took earlier this month.
Despite a book of USD3bn for its deal priced last night, Reliance Industries saw its perps losing nearly 4 points on the break this morning.
Although some bankers were quoting mid-spreads of around 98, other quotes were at 96-97, with the last indicated at 96.375/96.875 mid-afternoon. Private banks were seen coming in to pick up as the bonds sank, helping to shore up the bonds at the 96.5 levels.
Agile perps have sunk to 94/95 today, while Cheung Kong’s senior perps remained in the red at 96/97, not much changed from two weeks ago when they were seen at 96.5.The Reliance perp was the only new issue among the five that priced last night that went into the red in secondary markets today.
There was little activity on Hana Bank’s new 2016s, which were quoted slightly above110bp, around the 110bp where they priced.
“It is a fairly tight priced deal, and it’s a Korean deal, so it’s not very exciting,” said one trader, quoting in the same breadth that the Korea Southern Power 2018s were at 116/117bp today, a touch wider from the issue price of 115bp.
More activity was seen in Melco Crown’s 2021s, which gained to 100.90/101.40, up from issue price at par. China Railway’s 2023s, which priced at 190bp last night, saw the bonds rally to 184/182bp on the back of good bids from Chinese clients.
KWG Property, meanwhile, looked like it has firmly put its failed perp attempt behind it as it saw its new 2020s senior bonds moved higher to 100.25/100.55 after pricing at par last night.
While bonds were generally higher, credit spreads showed signs of weakening. The iTraxx Asia IG was indicated at 108bp/111bp versus yesterday’s 108bp mid-spread.
That is about 4bp wider from Monday’s levels. Indonesia’s 5-year CDS were quoted at 143bp mid, about 10bp out from two Mondays ago, while Philippines CDS was at 102.5bp.