SINGAPORE, Oct 4 (IFR) - Asian credits crept back towards
recent tight levels, although there were signs of investors
differentiating between high-yield issuers.
The Asia ex-Japan iTraxx investment-grade index was half a
basis point tighter at 115.6bp/116.6bp, with US Treasuries flat
during the Asian session.
"I don't understand why people are buying at these levels,"
said a fund manager.
CK Hutchison's 2021s tightened 2bp to Treasuries plus 90bp,
taking it back to its spread at issue. Its 2026s were 1bp
tighter at Treasuries plus 129bp, inside the reoffer spread of
Evergrande Real Estate's 2018s rallied half a point today to
104.2 after it announced plans for a backdoor listing of its
onshore property business.
Moody's said the proposed move would improve Evergrande's
profitability, but S&P noted that it would not reduce the
developer's gearing, and might even encourage it to issue more
It was a mixed day for high yield. New World Development's
perpetual notes gained half a point to 101.75 and China National
Bluestar's 2021s went up the same amount to 100.2.
"We thought Bluestar offered decent value, but that hasn't
stopped some people from shorting it," said the fund manager.
Country Garden's 7-year non-call 4 bonds were flat at 97.75,
still below the reoffer price of 98.539.
Cinda Asset Management's AT1s were seen at 98.75 and China
Citic Bank's at 99.4. State Bank of India's AT1s gained half a
point today, but were still underwater at 99.5.
(Reporting by Daniel Stanton; editing by Dharsan Singh)