ASIA CREDIT CLOSE: Credit active; Huawei rallies

Last Updated: Wed, Feb 15, 2017 14:25 hrs
Asia markets

HONG KONG - Asian credits saw active trading on Wednesday as Huawei's well-received new issue continued to tighten in the secondary market.

The Chinese telecommunications company attracted more than US$7.6bn of orders for a US$1.5bn unrated multi-tranche offering yesterday.

The five-year and ten-year notes were 5bp-7bp tighter after reoffer pricings on both tranches squeezed about 30bp from initial price guidance.

"Undersubscribed fund managers and Chinese banks chased the notes in the secondary market," said a Hong Kong-based credit trader.

He said that tight pricing on the back of a massive order book not only led to the repricing of Huawei's curve, but also to that of Chinese internet companies such as Alibaba. He noted that Alibaba's 2024 were spotted about 4bp tighter.

However, recent new Chinese bank issues underperformed on heavy supply. Shanghai Pudong Development Bank's new 2020s were bid at 103.7, according to Tradeweb.

The iTraxx Asia ex-Japan investment grade was 1.14bp wider in the afternoon.

In the high-yield sector, Yingde Gas's US dollar notes were among the biggest movers, falling 1-2 points in cash prices, said another trader.

Air Products, which is in a potential takeover discussions with Yinde Gas, issued a letter yesterday refuting that it has received due diligence materials from Yingde Gas.

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