HONG KONG, June 28 (IFR) - Asian credits were soft on Wednesday, tracking weaker regional equities after Wall Street was rattled overnight on the postponement of the U.S. healthcare reform vote and amid rising concern over the European Central Bank’s tapering of its QE programme.
“Investment-grade credits, in general, traded 1bp-2bp wider, due to higher rates and weaker risk sentiment,” said a Hong Kong-based trader.
The iTraxx Asia IG index was slightly wider, being indicated at 86.25bp/87.50bp.
High-yield segment was also weaker. Chinese property names fell 0.25-0.5 points due to increased supply of new bonds from the sector with Evergrande complex still under water, according to the trader.
Yuhuang Chemical’s 6.875% 2020s were flat today at 95.50. The bonds slumped 4 points yesterday on news that the group may face demand under guarantees it gave to another group.
New issues traded mixed with IG names doing well and high-yield credits facing sell-offs.
For the IG new issues, Korea Development Bank’s US$300m 5-year Green floaters, priced at 72.5bp over three-month US dollar Libor, traded around 4bp tighter.
China Gold International Resources’ US$500m 3-year US dollar bonds, priced at 185bp over Treasuries, traded 2bp tighter.
Swire Pacific’s US$300m 7-year notes, priced at Treasuries plus 105bp, traded 1bp tighter.
Among the new high-yield issues that plunged, textile and apparel maker Shandong Ruyi Technology Group’s newly priced US$200m 6.95% 5-year non-call three notes fell around 0.75 points to a cash price of 95.5. The bonds were priced at 96.237 to yield 7.875%.
Greenland Hong Kong’s US$200m of 364-day US dollar notes, priced at par to yield 4.50%, were hovering at reoffer.
Shimao Property, which just added US$150m to last week’s offering of 4.75% 5-year non-call three senior notes, fell 0.5 points to 100.
The reopening, done at a cash price of 100.5, took the total outstanding on the notes to US$600m.
Reporting by Carol Chan; editing by Dharsan Singh