ASIA CREDIT CLOSE: New issues in focus, Shui On holds up

Last Updated: Tue, Dec 04, 2012 09:30 hrs

HONG KONG, Dec 4 (IFR) - Asian credits traded on a weak note but the primary market was still active with two live trades in the market indicating that funds are still ready to put money to work as long as there is a decent pick up.

However the market weakness affected the recently printed new issues. The CDB Leasing 10-year bonds were around T+155bp, 2bp wider than yesterday's close but still much better than the T+170bp pricing last week.

"There is a sell-off across the new issues with certain large accounts consolidating their positions for the year," said a Singapore-based trader.

However the New Shui On perps managed to remain above water. The Chinese property developer yesterday printed USD 500mm at 10.125%/par late yesterday.

The bonds went as high as 100.25 before trading back down to the 99.625 area but PB demand pushed the bonds back to the 100.2-100.4.

China Cosco's 10-year bonds also held up ending the day tighter again at T+219bp, from T+225bp quoted yesterday, and much tighter than the T+250bp reoffer printed last week.

Olam bonds gained some ground this morning after the Singapore commodities trader announced a rights issue late last evening. However, fast money accounts came in to take profit on positions and hence pushed the bonds back to yesterday's Asian end of day levels. The US dollar bonds maturing in 2017 were quoted around 90.

Sovereign CDS spreads were around 2-5bp wider and low beta sovereigns like Korea and China were underperforming. Sovereign cash bonds were also 0.25-0.5points weaker across the board. The itraxx Asia IG index was around 109bp

New issues were back in the market on Tuesday after Shui On's success with its rare unrated perpetual bond from a Chinese property developer. Keppel Land was marketing 7-yr bonds at T+235bp while Citic Pacific was tapping its 2023 bonds for an additional USD250m.

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