February 27, 2017 / 8:26 AM / 9 months ago

ASIA CREDIT CLOSE: High yield recovers ground after weak Friday

SINGAPORE, Feb 27 (IFR) - On a rare quiet day for Asian high yield, the segment seemed to recover lost ground from Friday’s weak trading session. Conversely, there was generally a sell-off in investment-grade credit, especially at longer tenors.

The Asia ex-Japan iTraxx IG index widened half a basis point to 95bp/97bp, with some recent issues slipping wider.

In the IG segment, Citic’s 2022s widened 1bp to Treasuries plus 119bp, while its 2027s moved out a hefty 7bp to Treasuries plus 157bp.

Huawei’s 2022s slipped 2bp and its 2027s widened 6bp to Treasuries plus 132bp and 170bp, respectively.

However, Bank of China’s new 2020s and 2022s tightened 2bp each to Treasuries plus 108bp and 100bp, respectively.

In high yield, Future Land’s 2020s were a 10th of a point higher at 100.2, yielding 4.9%, after the company reported a 33% increase in full-year profit. Just over two weeks ago, the bonds had been trading below par.

Evergrande Real Estate’s dollar bonds callable in February 2018 were seen unchanged at a cash price of 111.6, yielding 5.6%, after it sought consent to ease some of related covenants.

Noble Group’s 2020 bonds dropped 1.25 points on Friday, after independent research provider Iceberg again criticised its accounting practices. Today, the bonds were seen at a cash price of 96.9, yielding 8.0%.

BUMA’s 2022 bonds gained more than a quarter of a point, continuing a strong run, and were seen at 102.6, yielding 7.1%. (Reporting by Daniel Stanton; editing by Dharsan Singh)

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