February 3, 2017 / 8:31 AM / 6 months ago

ASIA CREDIT CLOSE: Credit strengthens after PBOC tightening move

SINGAPORE, Feb 3 (IFR) - The People's Bank of China tightened policy slightly on the first day back from holidays, raising rates 10bp on open market operations to send equities lower.

China Development Bank's recent 2027 issue tightened 1bp to Treasuries plus 104bp, as investors shifted to safe havens.

Across the broader region, the Asia ex-Japan iTraxx investment-grade index tightened 2bp to 110bp/112bp.

The Republic of Korea's 2027 bonds were flat at a Treasury spread of 51bp after the presidential Blue House blocked prosecutors from searching the offices of Park Geun-Hye, in relation to a corruption investigation. Korean 5-year CDS was 1bp tighter.

Some Indian oil credits were better bid, after Finance Minister Arun Jaitley outlined plans to create a national champion through mergers of some state-owned oil and energy companies, though he did not give the names he had in mind.

Bharat Petroleum's recent 2027s tightened 2bp to Treasuries plus 189bp, while ONGC Videsh Vankorneft's 2022s were 1bp narrower at Treasuries plus 159bp and Oil India's 2024s were flat at 190bp.

State Bank of India's Additional Tier 1 notes were flat at a cash price of 100.5, after the Reserve Bank of India made it easier for Indian banks to make their AT1 coupon payments with the use of their statutory reserves.

Reporting by Daniel Stanton; editing by Dharsan Singh

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