Want Want Holdings Ltd. and Rolta India Ltd. are planning dollar-denominated offerings after issuance by Asian companies in the currency climbed to a three-month high amid speculation over further monetary easing.
Want Want, the Chinese manufacturer of rice cakes and beverages, hired Bank of America Corp. and JPMorgan Chase & Co. for a possible sale, according to a company filing. Rolta India, a software maker, also selected lenders to arrange a series of fixed-income investor meetings in Asia, Europe, and the U.S. from May 2, a person familiar with the matter said.
Investors betting that central banks will pump more money into the global economy supported $19 billion of offerings in Asia outside Japan, the most since January, according to data compiled by Bloomberg. Federal Reserve policy makers, who begin a two-day meeting today, may shift discussion away from when to reduce monetary stimulus, given data showing the economy is weakening, according to Pacific Investment Management Co.’s Mohamed A. El-Erian. Most economists in a Bloomberg survey predict the European Central Bank will cut rates this week.
“The expectation for easing from major central bankers around the world has definitely supported the Asian bond market,” said Singapore-based Leong Wai Hoong, who buys investment-grade and high-yield Asian dollar bonds at Nikko Asset Management Co., which manages about $154 billion. “The environment of low growth, low yield and low inflation is still supportive of spread products, such as corporate debt.”
Dollar notes from companies in the region have returned 0.9 percent this month as of yesterday, the most since February, Bank of America Merrill Lynch indexes show.
Want Want may sell a Reg S security after a series of fixed-income investor meetings in Asia and the U.S. from May 2, according to a person familiar with the matter, who asked not to be identified because the details are private.
Rolta India hired Barclays Plc, Citigroup Inc., DBS Group Holdings Ltd. and Deutsche Bank AG for a possible sale of a Reg S dollar bond to be guaranteed by the company and its subsidiary Rolta International Inc., among others, another person familiar with the matter said.
The cost of insuring corporate and sovereign bonds in the Asia-Pacific region against non-payment fell, according to traders of credit-default swaps.
The Markit iTraxx Japan index dropped 2 basis points to 81 basis points as of 9:04 a.m. in Tokyo, according to Citigroup prices. The benchmark has tumbled 78 basis points this year and is poised to close at its lowest level since May 2008, according to Citigroup and data provider CMA.
The Markit iTraxx Asia index of 40 investment-grade borrowers outside Japan decreased 3 basis points to 107 as of 9:00 a.m. in Hong Kong, Deutsche Bank prices show. The gauge is set to decline 15.3 basis points this month, according to CMA, which is owned by McGraw-Hill Cos. and compiles prices quoted by dealers in the private market.
The Markit iTraxx Australia index declined 3 basis points to 104 basis points as of 9:37 a.m. in Sydney, National Australia Bank Ltd. prices show. The gauge, which has ranged from 102.3 to 127.5 since Dec. 31, is on track for its lowest close since March 15, 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.