January 5, 2018 / 8:50 AM / 2 months ago

ASIA CREDIT CLOSE: Asia credits firm as investors add positions

HONG KONG, Jan 5 (IFR) - Asian credit markets were firm on Friday as investors continued to add positions at the beginning of the year.

In general, investment-grade credits were 1bp-2bp tighter, while Citic’s newly priced US$750m dual-trancher traded up, according to a Hong Kong-based trader.

“The overall market sentiment has been good since the start of the year and, across the board, we are seeing more buyers than sellers,” the trader said.

The iTraxx Asia ex-Japan IG index were at 62.75bp/63.75bp, about 3.6bp tighter for the week.

Citic’s new 3.50% 5.5-year notes were 6bp tighter and its 4.00% 10-year notes were 3bp narrower, versus the reoffer spreads of 125bp and 155bp wide of five-year and 10-year Treasuries.

Guangzhou R&F Properties’ 5.875% 2023s continued to see selling pressure after a US$100m tap yesterday. The 2023s were bid at 99.00 versus tap reoffer price of 99.426.

The trader said bonds of Chinese local governments financing vehicles garnered investor interest. Yiwu State-Owned Capital Operation’s 4.00% 2020s tightened 10bp this week and were being quoting at a spread of 215bp/210bp.

He also saw some interest from private-banking clients for HNA Group’s bonds after last year’s sell-off. The airlines-to-hotels conglomerate’s 8.875% 2018s, issued last November, gained 0.5 points this week to 98.

Evergrande’s 8.75% 2025s also jumped 1 point this week to 104.8. The Chinese developer said yesterday it had achieved Rmb501bn (US$77.3bn) of contract sales in 2017, exceeding its annual target. It has set a 2018 target of Rmb550bn.

Reporting by Carol Chan; Editing by Dharsan Singh

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