CLP Power Hong Kong Ltd. and China Tianrui Group Cement Co. are marketing dollar-denominated debt as the world’s second-biggest economy shows signs of picking up. Asia-Pacific bond risk fell, with the gauge for Australia sliding to a seven-month low.
CLP Power plans to sell debt due April 2023 at about 145 basis points more than 10-year Treasuries, while China Tianrui is marketing a sale of five-year notes at about 13.5 percent, according to people familiar with each deal. Thailand’s PTT Pcl (PTT) and Bharat Petroleum Corp. are also offering debt in the U.S. currency, people with knowledge of the details said.
China’s industrial production, retail sales and fixed-asset investment accelerated in September, government reports showed today. Gross domestic product rose 2.2 percent in the third quarter from the prior period, the fastest pace in a year, underscoring a strong outlook for credit markets, according to Dariusz Kowalczyk, a senior strategist at Credit Agricole SA in Hong Kong.
“China’s GDP figures are very encouraging,” Kowalczyk said. “Corporate bond issuance from China will continue as this shows that the growth momentum is strong.”
PTT, the Bangkok-based energy explorer that is Thailand’s biggest company by market capitalization, is marketing a sale of 10-year bonds at about 200 basis points more than similar- maturity government debt and 30-year notes at a spread of about 200 to 210. Bharat Petroleum plans to sell 10-year notes at about 320 basis points more than Treasuries, according to people familiar with the matter.
The Markit iTraxx Australia index slid 3.5 basis points to 132 as of 2:05 p.m. in Sydney, according to Credit Agricole SA. (ACA) The measure is on course for its lowest close since March 19, according to data provider CMA.
The Markit iTraxx Asia index of 40 investment-grade borrowers outside Japan dropped 1 basis point to 113.5 as of 11:05 a.m. in Hong Kong, Credit Agricole prices show. The gauge is set for its lowest close since Sept. 19, according to CMA, which is owned by McGraw-Hill Cos. and compiles prices quoted by dealers in the privately negotiated market.
The Markit iTraxx Japan index fell 5 to 207 as of 9:38 a.m. in Tokyo, Deutsche Bank AG prices show. The benchmark is on track for its lowest close since Sept. 19, according to CMA.
Credit-default swap indexes are benchmarks for protecting bonds against default and traders use them to speculate on credit quality. A drop signals improving perceptions of creditworthiness, while an increase suggests the opposite.
The swap contracts pay the buyer face value in exchange for the underlying securities if a borrower fails to meet its debt agreements.
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