November 10, 2017 / 8:07 AM / a month ago

ASIA CREDIT CLOSE: Asian credit follows Western markets wider

SINGAPORE, Nov 10 (IFR) - Asian credit was generally wider today, feeling the effect of a sell-off yesterday in Western markets as the U.S. Senate announced a new tax reform plan.

The proposal is less aggressive than the one that the Senate put forward, but investors clearly thought it would lead to higher yields.

The Asia ex-Japan iTraxx investment-grade index widened nearly 4bp to 81.25bp/82.25bp, while the Australia iTraxx index was 2bp wider at 68bp/69bp on thin trading.

Kia Motors’ 2027 bonds widened 3bp to Treasuries plus 131bp, but its 2023s were flat at plus 126bp.

The selling extended to high yield, too, with Chinese property bonds around half a point lower today, according to a credit trader.

China Evergrande’s offshore bonds were firmer today after Moody’s upgraded the Chinese property developer’s rating to B1 from B2, and its senior unsecured debt rating to B2 from B3.

Moody’s said it expected Evergrande to reduce leverage on the back of improving sales.

The Evergrande 2022s were flat at a cash price of 106.9, while the 2025s gained a quarter of a point to 105.4 bid, but the trader said there was still selling pressure.

Troubled commodities trader Noble Group’s 2022 bonds dropped half a point today to a cash price of 38.6, implying a yield of 39.3%, after it yesterday reported further losses for the quarter ended September.

Reporting by Daniel Stanton; Editing by Dharsan Singh

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