HONG KONG, April 28 (IFR) - Asian credits moved sideways Friday ahead of month-end with trading continuing to concentrate on new issues.
The iTraxx Asia investment-grade index was largely flat and indicated at 93bp/94bp.
“Recent heavy new issues supply and tight pricings have roiled market sentiment. New issues, in general, have not performed well,” a Hong-based trader from a Chinese bank said.
China Southern Power Grid overnight managed to price its debut US$1.5bn dual-tranche dollar bond offering despite coming right after a jumbo US$5bn four-tranche new issue from larger peer State Grid Corporation of China a day earlier.
Southern Grid’s newly priced five-year bonds traded flat in the secondary market while its 10-year bonds traded 2bp-3bp tighter.
State Grid’s new bonds regained about 1bp-2bp Friday from yesterday, but were still wider than their reoffer levels.
Performance of other new issues was mixed with bonds from China Minsheng Banking’s Hong Kong branch trading 3bp-4bp wider while Suncorp-Metway traded 2bp tighter.
In high yield, SOCAM Development’s newly issued 6.25% three-year bonds gained and were trading at a cash price of 100.6/100.7.
Chinese aluminium producer China Hongqiao’s 7.625% 2017s were flat and its 6.875% 2018s were bid at 97.40 versus 97.125 late yesterday, despite Fitch downgrading its ratings by two notches to B+ from BB with Rating Watch Negative outlook.
Hongqiao’s management has commented in a media interview that the group has sufficient funds to redeem the US$400m 2017s due on June 26.
Lucror Analytics maintained “not recommended” on Hongqiao notes due to corporate governance risk.
Reporting by Carol Chan; Editing by Vincent Baby