Kookmin Bank and CSI Properties Ltd. plan to sell dollar-denominated debt after the busiest day for offerings by Asia-Pacific issuers in the U.S. currency in more than 10 months. Bond risk rose in Asia.
Kookmin Bank plans to sell three-year notes at 105 basis points to 115 basis points more than similar-maturity Treasuries, a person familiar with the matter said, asking not to be identified because the terms aren’t set. Estate Sky Ltd., a unit of Hong Kong-listed developer CSI Properties, is marketing five-year bonds at about 6.5 percent, a separate person said. Asia-Pacific companies sold $5.93 billion of U.S. dollar notes yesterday, the most since $8.5 billion of offerings on Feb. 21, data compiled by Bloomberg show.
Westpac Banking Corp. led issuance from the region yesterday, followed by Toyota Motor Credit Corp. and Shimao Property Holdings Ltd. Average premiums on dollar-denominated bonds from Asia held at 250 basis points more than government debt yesterday, matching a 17-month low reached on Oct. 19, according to JPMorgan Chase & Co indexes. The cost of insuring Asian corporate and sovereign bonds from non-payment is on track for its first daily increase this year, according to credit-default swap traders.
“Spreads are so tight and we continue to see fund inflows so it makes sense for companies to come,” said Agnes Wong, a Hong-Kong based credit strategist at Nomura Holdings Inc. “A lot of the issuers are printing at historically tight spreads which provides them with very cheap funding.”
The Markit iTraxx Asia index of 40 investment-grade borrowers outside Japan rose one basis point to 102.5 basis points as of 1:43 p.m. in Hong Kong, Royal Bank of Scotland Group Plc prices show.
Thai Oil Pcl has hired Barclays Plc, HSBC Holdings Plc and Standard Chartered Plc to arrange a series of fixed-income investor meetings in Asia, Europe and the U.S. from Jan. 10 to discuss a possible dollar bond, according to a person familiar with the matter. A unit of Hainan Airlines Co. has obtained approval to sell as much as $500 million of seven-year bonds, according to a statement posted to the Shanghai stock exchange.
Yields on two bonds sold by Zoomlion Heavy Industry Science and Technology Co. meanwhile rose, data compiled by Bloomberg show. The construction machinery maker halted share trading after a Ming Pao Daily report which cited an anonymous letter questioning Zoomlion’s sales figures, Shen Ke, the company secretary, said in a phone interview.
Prudential Plc is considering a yield of about 6 percent for a perpetual bond that can be bought back by the company after five years, a person with knowledge of the sale said.
The Markit iTraxx Australia index rose 0.5 of a basis point to 112.5 basis points as of 4:37 p.m. in Sydney, according to Australia & New Zealand Banking Group Ltd.
The Markit iTraxx Japan index declined 1.5 basis points to 142.5 as of 2:28 p.m. in Tokyo, Deutsche Bank AG prices show. The gauge is set for its lowest level since March 19, according to CMA, which is owned by McGraw-Hill Cos. and compiles prices quoted by dealers in the privately negotiated market.
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.