HONG KONG, April 9 (IFR) - Asian credit spreads tightened Tuesday with new issues posting a strong performance, while Korean credits tightened on short covering.
The iTraxx IG index is set to close 2bp-3bp tighter at around 116bp/118bp.
The new 2023s from the Republic of Indonesia were around 100.15/101.35 up from a reoffer price of 98.953, while the 2043s were at 100.10/100.30, up from a reoffer of 98.012.
Bank of Ceylon 2018s were 100.20/100.40 up from a reoffer of par, while CIFI Holdings’ 2018s were at 101.375/101.50, also gaining on a par reoffer.
Short covering continued in Korean credits as they tightened 5bp-15bp. There was some selling seen later in the session, but most bonds still ended tighter on the day.
Kexim 2022s were trading at T+123bp, tighter than T+132bp/127bp this morning. KEB 18 were also traded up at T+134, 6bp tighter on the day.
Lifestyle International 2017s were trading tight at around T+188bp and Hainan Airlines 2020s at T+135.
CNPC’s seasoned bonds underperformed, being quoted about 10bps wider after the new issue announcement. The issuer is marketing a 3-part deal, which is set to price today.
China Metallurgical Group Corp’s (CMGC) 2023s widened 25bp after Moody’s downgraded the issuer’s senior unsecured bond rating to Ba1 from Baa3.
On the high-yield side, paper is up about 25 cents with most flows concentrated on new issues from CIFI Holdings and Bank of Ceylon.
“We are seeing more flows towards emerging market assets and this is obviously because of the BoJ move -- the environment is risk on,” said a Singapore-based trader.
Traders also said that the new issues would see a lot of support in the current market environment because of the Bank of Japan’s aggressive monetary easing.