July 20, 2017 / 8:34 AM / 7 months ago

ASIA CREDIT CLOSE: Asia credits firm; new issues perform

HONG KONG, July 20 (IFR) - Asian credits were firm on Thursday as equity markets in the region rose to their highest levels in nearly a decade, following Wall Street gains.

Investment-grade credits, in general, traded 1bp-2bp tighter, with more buyers than sellers, according to a Hong Kong-based trader.

The iTraxx Asia IG index tightened marginally and was indicated at 84bp/85bp.

New issues priced overnight all performed well.

Doosan Infracore’s US$300m 2.50% 3-year senior unsecured bonds, with a guarantee from Korea Development Bank, traded 4bp tighter, from reoffer spread of at Treasuries plus 102.5bp.

Chinese coal miner Shandong Energy’s US$300m 4.55% 3-year bonds traded up 0.5 point higher with a cash price of around 100. The bonds were priced at 99.585 for a reoffer yield of 4.70%.

Chinese property developer Gemdale’s US$200m 4.95% 5-year non-call three bonds also traded up 0.25 point. The bonds were priced at 99.891 to yield 4.975%.

HNA Group’s bonds slumped on news that Bank of America has decided not to do business with HNA, citing concern over the company’s opaque structure, among other issues.

Its 6.25% 2021s plunged 5.5 points to 88.5 while its Hong Kong Airlines unit’s 7.125% perp fell 1 point to 94.

Meanwhile, bonds of Sunac China and Guangzhou R&F Properties rebounded today as investors digested the restructured property deal with Dalian Wanda Group.

Wanda reworked a US$9bn deal to sell hotel and tourism assets to Sunac after banks scrutinised their credit risk.

The new deal, which was revealed on Wednesday’s afternoon, brought in R&F as the buyer of 77 hotels while Sunac bought 91% equity in 13 tourism projects.

R&F’s 5.75% 2022s rebounded 0.3 point to 99.1 after dropping 2 point yesterday. Sunac’s 8.75% 2019s gained 0.75 point and recovered to above 101.25. Wanda’s 7.25% 2024s fell 1 point to 96.9 after gaining 2 points yesterday.

Reporting by Carol Chan; Editing by Vincent Baby

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