Property developer Alam Sutera is selling five-year notes at a yield of about 9.25 percent, according to people familiar with the matter, who asked not to be identified because the matter is private. Dah Sing is offering 10-year Basel III-compliant Tier 2 securities in the U.S. currency at about 400 basis points more than Treasuries, a separate person said.
Dollar bond sales in Asia outside Japan are already $14.2 billion this month, the most since October when $14.8 billion of notes were sold, according to data compiled by Bloomberg. In January last year a record $23.4 billion of debentures were issued. Dollar borrowing costs averaged 5.24 percent yesterday, near a five-week low of 5.23 percent reached Jan. 17, according to JPMorgan Chase & Co. indexes.
“What we’re seeing in credit markets is huge issuance,” said Tim Condon, the Singapore-based head of Asian research at ING Groep NV. “A year ago was a record for January and we’re on track to at least hit that if not exceed it, so convictions remain very positive.”
Alam Sutera is the first Indonesian borrower to sell dollar bonds this year, as yields for the country’s issuers fell to 6.34 percent on Jan. 21, the least since Dec. 31, according to JPMorgan indexes.
The developer wants to raise debt at a lower coupon rate and extend its tenor, Hendra Kurniawan, Alam Sutera’s Jakarta-based corporate secretary said in a Jan. 8 interview, the day after the company’s credit rating was upgraded by Standard & Poor’s.
Hong Kong-based Dah Sing (2356) Bank, a unit of the group, hired Citigroup Inc. and HSBC Holdings Plc to help manage its sale, which it expects to complete as early as today, the person familiar with that matter said.
The company last tapped the international debt capital markets for dollars in April 2011, when it raised $100 million selling floating-rate notes due in April, according to data compiled by Bloomberg.
The cost of insuring corporate and sovereign bonds in Asia rose today after posting the biggest drop in more than a month yesterday, according to traders of credit-default swaps.
The Markit iTraxx Asia index of 40 investment-grade borrowers outside Japan climbed 1 basis point to 143 basis points as of 8:24 a.m. in Singapore, Australia & New Zealand Banking Group Ltd. prices show. The gauge fell by 3.75 basis points on Jan. 21, the most since Dec. 10, according to data provider CMA.
The Markit iTraxx Australia index advanced 1.5 basis points to 102.5 as of 11:23 a.m. in Sydney, Westpac Banking Corp. prices show. The benchmark is set to increase for a fifth consecutive day and is near the highest level since Dec. 17, according to CMA, which is owned by McGraw-Hill Cos. and compiles prices quoted by dealers in the private market.
The Markit iTraxx Japan index rose 0.75 of a basis point to 80.5 basis points, according to Citigroup prices as of 9:23 a.m. in Tokyo. The measure hasn’t declined since Jan. 15 and is poised to reach the highest level since Nov. 21, CMA data show.
Credit-default swap indexes are benchmarks for insuring 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.
To contact the editor responsible for this story: Katrina Nicholas at firstname.lastname@example.org