China Resources Land Ltd. (1109) is marketing a sale of dollar-denominated bonds after the busiest day for Asian offerings in a month. Regional bond risk climbed.
Resources Land, a property developer in cities including Beijing and Shanghai, plans to sell five- and 10-year securities as soon as today, a person familiar with the matter said, asking not to be identified because the terms aren’t set. China Properties Group Ltd. is marketing three-year dollar bonds at about 12.75 percent, a person familiar with the matter said yesterday.
Issuers from Asia outside Japan raised $1.55 billion from sales in the U.S. currency yesterday, the busiest day since Jan. 15, data compiled by Bloomberg show. Regional bond risk rose a third day, climbing from a six-week low on Feb. 17, prices from Australia & New Zealand Banking Group Ltd. and data provider CMA show, as a private gauge of Chinese manufacturing slid to its lowest in seven months.
“Even though sentiment is less positive after the data, the overall market still looks OK,” said Annisa Lee, a Hong Kong-based credit analyst at Nomura Holdings Inc. “If issuers provide a sufficient new issue premium, investors should be still comfortable that their bonds will perform in the secondary market.”
The preliminary February reading of 48.3 for a Purchasing Managers’ Index released today by HSBC Holdings Plc and Markit Economics compares with January’s final figure of 49.5 and the 49.5 median estimate in a Bloomberg News survey of 17 economists. A number below 50 indicates contraction. Output shrank for the first time in six months in January.
Resources Land plans to sell five-year bonds at about 300 basis points more than Treasuries and 10-year notes at about 340 basis points more than government debt, the person familiar with the matter said.
The company priced five-year securities at a 290 basis-point spread in May 2011, data compiled by Bloomberg show. Yield premiums on Chinese bonds in the U.S. currency have fallen 129 basis points since then, JPMorgan Chase & Co. indexes show.
The Markit iTraxx Asia index of 40 investment-grade borrowers outside Japan climbed 2 basis points to 139 basis points as of 10:13 a.m. in Singapore, ANZ prices show. The gauge is set for its highest close since Feb. 13, according to CMA, which is owned by McGraw-Hill Cos. and compiles prices quoted by dealers in the privately negotiated market.
The Markit iTraxx Australia index added 2 basis points to 102 basis points as of 11:37 a.m. in Sydney, according to Westpac Banking Corp. The benchmark is on course for its highest close since Feb. 10, according to data provider CMA.
The Markit iTraxx Japan index advanced 1 basis point to 78.8 as of 9:38 a.m. in Tokyo, Citigroup Inc. prices show. The measure is on track for its biggest increase since Feb. 14, 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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