SINGAPORE, March 19 (IFR) - China real-estate bonds
continued to take a hit over concerns that a small Chinese
property company's potential loan default may be the tip of an
China investment-grade property cash bonds widened another
5bp, while high-yield paper from the segment pushed as wide as
A Fitch report released yesterday that more defaults will
occur did not help Chinese credits, although the ratings agency
says these will be confined to smaller companies. One such
company, Zhejiang Xingrun, is expected to default on a CNY3.5bn
in bank and other debt.
Outstanding bonds from Chaori, Cifi and Wanda were some 5bp
wider. The falls, however, would have been larger if not for
some bargain-hunters, who moved in for opportunistic buying in
property names. Wanda's 2018s and 2024s benefited from the
bottom-fishing, being quoted at 410bp and 465bp, respectively,
over US Treasuries.
Korean bonds were 2bp-3bp wider, as the weak sentiment
spilled into that segment.
In contrast, Indian bonds were faring better, thanks to a
report from S&P today, lauding their efforts to improve high
financial leverages and strengthening their credit profile as a
A launch of IDBI's US dollar 5.5-year bond at a price of
370bp over US Treasuries had no impact on outstanding bonds,
which tightened slightly. IDBI's outstanding 2018s were quoted
at 290bp, while its January 2019s were at 325bp.
Indonesian paper continued to grind tighter about half a
point today. "People are getting more comfortable with the
sovereign, and the paper looks cheaper, than, say, Turkey," said
one trader. "It is also a reflection of the movements in US
Treasuries, which tightened 2bp yesterday."
However, trade volumes were lower than usual as several
players were sidelined ahead of the US FOMC meeting due to be
completed tonight in the US.
While cash bonds were weak, Asian credits were holding quite
well. The IG index was quoted at 127bp/130bp, about 3bp tighter
from yesterday. Indonesia's 5-year CDS move in nearly 6bp today
to 171bp/178bp, while China's CDS bounced back 2bp tighter.
The end of the street protests in Thailand boosted the
sovereign's CDS to 123bp/131bp, 4bp lower than yesterday.