February 7, 2018 / 8:27 AM / 2 months ago

ASIA CREDIT CLOSE: Credits recover slightly; caution remains

HONG KONG, Feb 7 (IFR) - Asian credit markets stabilised on Wednesday after Wall Street’s sharp gains overnight.

“The credit market recovered slightly today but investors remained very cautious and trading in the secondary market was thin,” said a Hong Kong-based credit trader.

The primary market also saw some activity with three offerings of US dollar notes being marketed today. But bankers said supply would be very limited before the Lunar New Year, which falls on February 16.

“Given the current market volatility, even securing anchor orders cannot guarantee a successful deal. We suggest issuers wait till late February to launch deals,” said a Hong Kong-based syndicate banker with a Chinese bank.

The iTraxx Asia ex-Japan investment-grade CDS index was 0.5 bp tighter at 69bp/70bp after widening about 7bp yesterday.

Chinese sovereign five-year CDS was seen around 2bp tighter at 57bp.

Alibaba’s 2.80% 2026s were 2bp tighter, being bid at 70.5bp over US Treasuries and China Cinda’s 3.875% 2023s were bid 4bp tighter, according to Tradeweb.

HNA Group’s 8.875% 2018s were seen bid at a cash price of 96.37.

Reuters reported this morning that HNA Real Estate Group, an HNA Group company, failed to make an early payment it had agreed to on a Rmb1.7bn (US$271.9m) trust product that falls due next week.

Reporting by Ina Zhou; Editing by Vincent Baby

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