National Australia Bank Ltd. is planning a sale of dollar-denominated debt as the nation’s lenders boost offerings in the U.S currency to the most in 45 weeks. Corporate bond risk in Australia and Japan fell.
Melbourne-based NAB, the country’s fourth-largest bank, is considering offering senior-unsecured notes and covered bonds in the near future, a person familiar with the matter said, asking not to be identified because the terms aren’t set. Korea East-West Power Co. and China Mengniu Dairy Co. plan to sell five-year dollar securities, separate people said.
A gauge of investment-grade bond risk in Australia is set to slide today after rising from a six-month low earlier this week, according to credit-default swap traders. Westpac Banking Corp. issued $3.25 billion earlier this week, the most by the nation’s financials since the period ended Jan. 11, data compiled by Bloomberg show.
“It would seem that they view the market as appropriately receptive,” said John Sorrell, the Sydney-based head of credit at Tyndall Investment Management Ltd. “If they can fund comfortably, they will within reason take opportunities to use markets in advance of needs.”
The Markit iTraxx Australia index retreated 0.75 basis point to 104 basis points as of 11:43 a.m. in Sydney, according to Citigroup Inc. The measure is declining for the first time in three days after falling to 101.3 basis points on Nov. 18, the lowest since May. 21, according to CMA, which is owned by McGraw-Hill Cos. and compiles prices quoted by dealers in the private market.
Korea East-West Power, part of South Korea’s largest electricity generator, is marketing five-year notes at about 155 basis points more than similar-maturity Treasuries, a person with knowledge of the matter said. Mengniu Dairy is offering bonds at about 250 basis points more than U.S. government debt, another person said.
The Markit iTraxx Asia index of 40 investment-grade borrowers outside Japan advanced one basis point to 132.5 as of 8:46 a.m. in Hong Kong, Australia & New Zealand Banking Group Ltd. prices show. The benchmark, which has ranged from 117.5 to 170.3 this half, is on track for its highest close since Nov. 15, CMA data show.
The Markit iTraxx Japan index dropped one basis point to 81.75 basis points as of 9:45 a.m. in Tokyo, Citigroup prices show. The gauge is poised to fall 8.95 basis points from Oct. 31, according to data provider 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. A basis point is 0.01 percentage point.