September 26, 2017 / 8:18 AM / a year ago

ASIA CREDIT CLOSE: Asian credits steady, despite rising Korean tension

HONG KONG, Sept 26 (IFR) - Asian credits held steady on Tuesday, despite an escalating war of words between the U.S. and North Korea.

“Geopolitical tension on the peninsula didn’t move the market much; investors are getting used to it,” said a Hong Kong-based trader.

The trader spotted some buying flow into Chinese leasing companies as their bonds traded 2bp-3bp tighter. Otherwise, other investment-grade credits were, generally, little changed.

The iTraxx Asia investment-grade index was 1bp wider at 73bp/74bp.

Korean sovereign 5-year CDS was also 1bp wider at 73bp/75bp. Kexim-backed Hanjin International’s newly priced US$300m 3-year floating-rate Green bonds, priced at Libor plus 95bp, were flat.

Other new issues were mixed.

Shougang’s US$400m 3.375% 5-year notes traded around 5bp tighter, versus reoffer of Treasuries plus 162.5bp.

Nan Fung’s US$410m 3.875% 10-year notes were hovering at reoffer of Treasuries plus 175bp.

Yuzhou Properties’ US$300m 5.375% perpetual non-call 5 notes, priced at par, however, traded weak and were bid at a cash price of 99.70.

Although eight Chinese cities, mostly Tier-2 cities, introduced new property cooling policies at the weekend, Chinese property bonds were, in general, relatively stable today after trading down 0.25 point yesterday.

Shares of Chinese developers slumped yesterday and some fell more than 10%. Chinese developers shares still traded weak today.

CreditSights has said that, from a credit standpoint, it is less concerned about the new round of property tightening measures.

“We still believe most of the developers we follow will meet their contracted sales targets this year and expect them to preserve liquidity by managing their land acquisition budgets,” the research firm said.

Reporting by Carol Chan; Editing by Dharsan Singh

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