June 29, 2017 / 8:35 AM / 5 months ago

ASIA CREDIT CLOSE: Asia credits firm; Baidu bonds shine

HONG KONG, June 29 (IFR) - Asian credits were firm on Thursday, tracking stronger regional equities after a substantial overnight rebound on Wall Street.

Investment-grade credits, in general, traded 2bp tighter as tech bonds continued to see buying interest, according to a Hong Kong-based trader.

The iTraxx Asia IG index tightened marginally, indicated at 84.5bp/86.25bp. China’s sovereign 5-year CDS traded 2bp narrower and was quoted at 68bp, after trading 4bp wider yesterday.

There was some rebound in Chinese property bonds today after yesterday’s sell-offs.

Evergrande 8.75% 2025s gained more than 1 point, being quoted at a cash price of 98.6, after pricing at par last week. Kaisa Group’s 9.375% 2024s gained 0.2 points today to around 100.95.

China Hongqiao’s 6.875% 2018s were flat, even though the aluminium producer announced it had been granted a CNY20bn (US$2.95bn) 2-year credit line by Citic Bank.

CreditSights said the Citic Bank credit line and Hongqiao’s recent bond redemption were encouraging.

However, given that the company had yet to dispel fully concerns over its accounting and corporate governance, CreditSights maintains its underperform recommendation on the bonds.

Performances of new issues priced yesterday were mixed.

Baidu’s newly priced US$1.5bn dual-trancher traded well. The 5-year notes were 5bp tighter, while the 10-year notes were 2bp tighter, from reoffer of Treasuries plus 118bp and 145bp, respectively.

China State Construction’s US$1bn dual-trancher notes were mixed. The 5-year was 4bp tighter, but the 10-year was 1bp wider, from reoffer of Treasuries plus 112.5bp and 135bp, respectively.

Chinese property developer Fantasia’s newly priced US$300m 5NC3 notes traded weak at a cash price of 99.25. The notes were priced at 99.797, with a coupon of 7.95%, to yield 8%, in line with earlier guidance of 8% area.

Reporting by Carol Chan; editing by Dharsan Singh

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