November 30, 2017 / 8:36 AM / a year ago

ASIA CREDIT CLOSE: Alibaba dominates quiet credit markets

SINGAPORE, Nov 30 (IFR) - Asian credits were broadly stable in quiet trading, despite weak equity markets in the region.

The iTraxx Asia ex-Japan investment-grade index narrowed over 1bp to 73bp/74bp. China’s 5-year CDS was flat at 56bp/57bp although the Shanghai Composite was down 0.6%.

Chinese stocks fell mainly because of profit-taking activity in the real estate and financial sectors.

Alibaba’s US$7bn bonds dominated the secondary market, just like they did in the Asian primary markets yesterday. The bonds gained on strong demand from under-allocated investors that put in orders of close to US$40bn.

The 40-year tranche, the longest of dated notes for a Chinese company, rallied to 148bp/145bp against reoffer spread of 158bp over US Treasuries.

The 2.8% 2023s were also firmer at 63bp/62bp after pricing at 73bp, while the 3.4% 2027s were 108bp/106bp, or around reoffer spread of 108bp.

Power Finance Corp’s rare notes were not widely traded after the US$400m 10-year Green bonds priced at 157.5bp on Tuesday. One quote at 162bp/156bp was heard, but the wide range reflected the illiquidity in the paper.

Traders said North Korea’s firing of an intercontinental ballistic missile yesterday had not affected the markets.

“There is still a geopolitical risk that the markets should be worried about, but, for the moment, everyone seems rather complacent about it,” said one trader.

Reporting by Kit Yin Boey; Editing by Dharsan Singh

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