HONG KONG, Feb 26 (IFR) - Asian credit spreads were slightly wider on Tuesday but the market held up well compared to the weakness in global equities. That allowed the flow of new deals in the primary to go through uninterrupted.
“There was some profit taking, a little defensive, some of the bonds have widened out 5bp-7bp,”said a Singapore-based credit trader. Yet, the iTraxx Asia ex-Japan IG index was almost unchanged in the day, around 109.50 at the close.
Benchmark Korean names were unchanged as well, in further proof of the resilience of Asian credits. “Korea has been quite representative of the fact that the market hasn’t really widened out,” the trader said.
KDB 17s traded at T+80 and Kexim 22s traded at T+106, both unchanged.
Unrated Citic Telecom also came out with price talk on a 12-year bullet at 6% area and KHFC was out with a 5-year covered bond at T+110bp.
Surprisingly against the backdrop of sharply declining equity markets, the Asian perp sector held up well, with the recovery of the Agile and Reliance perps ongoing. They were quoted at 94.75 and 98 bid respectively.
Some bonds ended up wider nonetheless. Power Grid Corp 2023s traded at UST+205, some 10bp wide to the T+195 at which they were being offered last week. Indian bank bonds also widened 5bp-10bp in the context of the overall risk-off environment.
Still, traders said that the fact that investors have been given the past three weeks to digest the record issuance of January was helping secondary markets.
Deals have started trickling in this week, though, after the Lunar New Year break with Glorious Property’s 5-year bond being the first high-yield transaction in new Chinese cycle. Those bonds held steady around the reoffer level of par today, in spite of a sell-off in equity markets.
Meanwhile, other transactions were lining up. Bank of Communications announced a 10-year guaranteed bond this morning at T+210 area and has just revised that guidance to 195bp over amid strong demand.
Traders said that other bank guaranteed papers were trading weaker after the new issue, though. China Cosco’s 2022s were around T+133bp/T+112bp while Hainan Airlines 2020s were at T+162bp/T+155bp.