SINGAPORE, Jan 13 (IFR) - New issuance started to accelerate this week, but it is not weighing on the secondary market as investors have reopened their books for the year and are mopping up primary supply.
“New issuers are coming out in a pretty orderly fashion and seem to be doing pretty well,” said a credit trader. “The market is taking it in its stride.”
A new 10-year issue from the Republic of Korea tightened as much as 6bp in early trading, before settling at Treasuries plus 51bp, 4bp inside the pricing level.
This week’s issues from New World China Land and Adani Ports were holding firm around reoffer, while Bharat Petroleum, despite pricing flat to its curve, had tightened 5bp to Treasuries plus 195bp.
Taikang Insurance was a strong performer in the investment-grade sector, improving from the reoffer spread of Treasuries plus 168bp to today’s spread of 157bp.
Bankers said a lot of investors in the recent investment grade offerings had taken a buy-and-hold approach, but were also trying to top up their holdings in the secondary market, having bought little in the last two months of 2016.
The Asia ex-Japan iTraxx IG index was 1bp tighter at 115bp/117bp, while Korean five-year sovereign CDS was unchanged following the new sovereign issue.
Reporting by Daniel Stanton; editing by Dharsan Singh