HONG KONG, April 13 (IFR) - Asian credit markets were weaker on Thursday as tensions on the Korean peninsula grew, with trading light ahead of the Easter holiday.
Most recent investment-grade issues from China traded below water following this week’s heavy supply, traders said.
“Holiday mood, heavy supply and geopolitical concerns all weighed on market sentiment today,” said a Hong Kong-based credit trader.
“Looking ahead, the momentum in China credit supply is likely to perdure in coming weeks.”
The iTraxx Asia IG index was 0.1bp wider at 101.0bp/102.5bp. South Korea’s sovereign five-year CDS has widened by 10bp so far this week.
South Korea said on Thursday it believed it would be consulted by the United States before any possible pre-emptive US strike against Pyongyang and China urged the North to halt its nuclear programme.
In investment grade, Citic Securities’ new 2020s and 2022s were bid 5bp-6bp wider than their reoffer price, respectively.
Beijing Enterprises’ euro-denominated new 2022s were bid at 99.95 after being reoffered at 99.966.
In the high-yield sector, Aluminum Corporation of China’s 2022s, sold at par yesterday to yield 4.25%, were seen 20bp wider, according to traders. Peking University Founder Group’s unrated new 2020s were spotted at 101.5 in cash price.
Reporting by Ina Zhou; Editing by Vincent Baby