Global A&T Electronics Ltd. is marketing a U.S. dollar-denominated bond two months after pulling an offering. Debt risk in the Asia-Pacific region rose.
The Singapore-based semiconductor tester is marketing $625 million of six-year notes, according to a person familiar with the matter. The company postponed a similar-maturity offering in November, other people with knowledge of the plans said at the time. Petron Corp., the Philippines’ largest oil company, is planning to sell perpetual securities at a yield of about 7.5 percent, while MIE Holdings Corp., a Hong Kong-headquartered oil explorer with fields in China’s Songliao Basin, is marketing five-year notes at about 6.875 percent, people said.
Global A&T Electronics is the second company this week to revisit a postponed deal as issuers take advantage of low yields and fund managers invest in the region. KWG Property Holding Ltd. sold seven-year notes yesterday after scrapping a perpetual bond less than two weeks prior. Emerging market bond funds have had 32 consecutive weeks of inflows, versus nine weeks of outflows for U.S. government bond funds, according to data from EPFR Global released Jan. 25.
“Issuers are rushing to market to get their deals done before Chinese New Year,” said Annisa Lee, a Hong Kong-based credit analyst at Nomura Holdings Inc. “Otherwise, they’ll have to wait for a few weeks for the markets to reopen.”
Average premiums on U.S. currency bonds in Asia were at a 20-month low of 245 basis points on Jan. 7, according to JPMorgan Chase & Co. indexes.
KWG Property sold $300 million of 8.625 percent seven-year bonds Jan. 29, according to data compiled by Bloomberg. The notes, sold at par, were trading at 100.2 cents on the dollar as of 10:28 a.m. in Hong Kong, prices quoted by BNP Paribas SA on Bloomberg show.
Global A&T’s bonds were pulled because of market conditions, three people familiar with the matter said on Nov. 7, asking not to be identified because the terms weren’t set.
The Markit iTraxx Asia index of 40 investment-grade borrowers outside Japan climbed one basis point to 110 basis points as of 8:05 a.m. in Hong Kong, Royal Bank of Scotland Group Plc prices show. The gauge is set for its highest close since Jan. 16, according to data provider CMA.
The Markit iTraxx Australia index advanced one basis point to 117.5 as of 11:05 a.m. in Sydney, according to Westpac Banking Corp. prices. The benchmark is poised for its highest close since Jan. 1, 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 climbed 0.5 of a basis point to 134.5 basis points as of 9:15 a.m. in Tokyo, according to Citigroup Inc. prices. The measure has fallen from 159 basis points at the end of 2012, according to CMA.
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.