August 5, 2015 / 9:22 AM / 4 years ago

ASIA CREDIT CLOSE: Petronas takes advantage of improving risk appetite

HONG KONG, Aug 5 (IFR) - Petronas saw its bonds tighten as an improvement in risk appetite drove investors to buy into the long-end of the curve.

The Petronas 2025s and 2045s tightened around 5bp, according to a Hong Kong-based trader, who put it down to investors taking advantage of an overnight rise in 10-year US Treasury yields.

The cost to protect against a default in Malaysia also dropped 3bp to 146bp/150bp after Reuters cited the country’s Anti-Corruption Commision as saying funds deposited into Prime Minister Najib Razak’s banks accounts were from a donation.

Sentiment improved in the Indian banking segment, with help from the marketing of ICICI Bank’s 5-year USD bonds. One trader said the bonds offered a decent premium.

Marketing of those bonds began on Wednesday morning at around 180bp over US Treasuries.

The paper of Indian lenders, such as Axis Bank’s 2020s were better bid, said a Singapore-based trader.

“Over past weeks, this space was very well bid and had tightened quite a lot, but it had lost some strength since mid-last week as much as 5bp-10bp,” he said.

Asia’s investment-grade CDS index was unchanged at 112bp/113bp. China’s 5-year CDS was 2bp wider.

Reporting By Frances Yoon; editing by Dharsan Singh

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