December 4, 2017 / 9:24 AM / a year ago

ASIA CREDIT CLOSE: Indonesia's new issue drives secondary trading

SINGAPORE, Dec 4 (IFR) - Asian credit was generally tighter on low volumes after the US Senate approved a draft tax bill, bringing corporate tax reforms a step closer.

That news over the weekend was not the driving force in the Asian trading session on Monday, though.

“The main factor today is the Indonesia new issue,” said a credit trader. “Everyone is trying to figure out where it is going to price.”

As Indonesia came out with a primary offering of 5s, 10s and 30s, its 3.85% 2027 bonds widened 2bp to Treasuries plus 117bp, and its 4.75% 2047s widened 3bp to Treasuries plus 164bp.

The Asia ex-Japan iTraxx investment grade CDS index tightened 1.6bp to 72.125bp/72.875bp.

Alibaba’s bonds have outperformed since pricing last week, with 10bp tightening in the 5.5-year, 30-year and 40-year tranches since then, and 4bp tightening in the 10-year.

The 5.5-year notes were bid at Treasuries plus 63bp, the 10-year at 104bp, the 30-year at 128bp, and the 40-year notes at 147bp.

China high-yield property bonds were little changed, with trading activity finally slowing down, said another trader.

Many analysts viewed Adani Abbot Point Terminal’s 2022 bonds as generously priced, given the low Triple B rating, but the bonds have actually widened to Treasuries plus 249bp, according to Tradeweb, since pricing at 245bp over on Thursday.

Reporting by Daniel Stanton; Editing by Vincent Baby

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