ASIA CREDIT CLOSE: Asian credits steady; new Road King perps rally


HONG KONG, June 20 (IFR) - Asian credits held steady on
Tuesday, while the pipeline for new issues remained active.
    "Trading was pretty quiet, although we continued to see some
buying of Chinese asset-management companies' 10-year bonds,"
said a Hong Kong-based trader.
    The Asia ex-Japan iTraxx investment-grade index was little
changed at 83.5bp/85.25bp.
    The bonds of Australian major banks largely showed little
adverse impact of Moody's one-notch downgrades to Aa3, with
stable outlooks, of its ratings on the issuers.
    The newly priced floating-rate notes of ICBC, Hong Kong
branch, were hovering at reoffer, said the trader. The Chinese
lender priced US$300m floaters of 3 years at 3-month Libor plus
77bp and US$400m notes of 5 years at Libor plus 87bp.
    Road King Infrastructure's newly US$300m 7.00% perpetuals,
which were priced at par, traded up and were bid at a cash price
of around 100.3 in the afternoon.
    Noble Group's 6% perpetual bonds, callable in 2019, plunged
more than 5 points to a cash price of 10 bid. This was after the
commodity trader said it would delay the payment of a coupon due
on the perps.
    The coupon is due on June 24, but payable on June 26, the
next working day. Its 8.75% 2022s fell around 2 points to
35.5/37.5, according to Tradeweb.
    Gome Electrical's 5% 2020s were flat at 100.25, even though
the company announced plans for a tap of up to US$100m of the
    David Tan, chief investment officer at Allianz Global
Investors'Asia Pacific fixed income, remains positive on Asia
high-yield credits as these bonds continue to offer attractive
returns, while default rates are low.
    "With the unpredictability surrounding the Trump
administration, we expect market volatility to escalate.
    Against the uncertain backdrop, we believe an actively
managed Asian fixed income portfolio can continue to offer
decent yield pick-up with relatively lower volatility within the
broader emerging market universe, supported by Asia's improved
fundamentals," Tan said.
    (Reporting by Carol Chan; editing by Dharsan Singh)


This article appears in: Politics , Fundamental Analysis , Stocks , World Markets , Bonds

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