HONG KONG, June 13 (IFR) - Asian credits held steady on Tuesday in light trading as investors sat on the sidelines ahead of the US Federal Reserve’s two-day policy meeting.
“The spreads of investment grade in general were flat but we still saw some buying interest on bank Tier 2 securities - those carry a relatively higher yield,” a Hong Kong-based trader said.
The Asia ex-Japan iTraxx investment-grade index was flat at 84.5bp/85.5bp.
“I think a 25bp rate increase this week is fully priced in, but the commentary about the Fed’s rate hike path and indication on when it will begin to reduce its balance sheet will still be keenly watched,” the trader said.
Tier 2 bonds of Chinese banks such as ICBC and Bank of China traded around 2bp tighter today.
JD.com’s 3.875% 2026s were 2bp wider amid recent sell-off of US tech shares.
Newly priced bonds saw support. Korea East-West Power’s 2.625% US$500m 5-year fixed-rate notes traded 1bp tighter, from reoffer of Treasuries plus 102.5bp.
Shui On Land’s 6.40% US$600m senior unsecured perpetual non-call five securities, which priced at par, gained 0.8 points in late afternoon.
Japfa Comfeed Indonesia’s 5.50% 2022s were bid at a cash price of 100.436, after a US$100m tap issue was priced late yesterday. The animal-feed and poultry producer sold the additional bonds at 100.25 to yield 5.438%.
Reporting by Carol Chan; Editing by Vincent Baby