Global Chemical Plans Dollar Debt; Australian Bond Risk Rises
PTT Global Chemical PCL (PTTGC) and Hyundai Motor Co. (005380) plan to sell dollar-denominated bonds even as a manufacturing contraction in China highlights slowing growth in Asia. Bond risk in Australia rose to a five-week high.
Global Chemical, a Thai petrochemicals company, hired four banks to arrange investor meetings from Sept. 5 and a dollar bond sale may follow the talks, according to a person familiar with the matter. Seoul-based Hyundai Motor hired Citigroup Inc., JPMorgan Chase & Co. and Morgan Stanley to help sell as much as $1 billion of bonds in October, Korea’s Maeil Business Newspaper said, citing an unidentified official at the company.
Chinese manufacturing unexpectedly shrank for the first time in nine months in August, government data showed on Sept. 1. Australia’s retail sales declined in July by the most in almost two years, the Bureau of Statistics said today, missing analysts’ expectations of a rise. The Markit iTraxx Australia index rose 1 basis point to 171 as of 10:28 a.m. in Sydney, National Australia Bank Ltd. prices show. The gauge is set for its highest close since July 27, according to data provider CMA.
“Macro risks emanating from China and elsewhere and a backlog of supply will probably cap credit spreads,” said Brayan Lai, a Singapore-based desk analyst in emerging market credit trading at Jefferies Group Inc. “But it’s still pretty conducive for companies to sell debt because investors have cash to put to work.”
Louis Dreyfus Commodities BV is talking to investors about pricing a perpetual bond at about 8.5 percent, a person with knowledge of that sale said today.
Hyundai doesn’t disclose details of any planned bond issuance, it said in an e-mailed response to Bloomberg queries about the Maeil Business Newspaper report.
The Markit iTraxx Asia index of 40 investment-grade borrowers outside Japan fell 1 basis point to 151.5 as of 8:28 a.m. in Hong Kong, Royal Bank of Scotland Group Plc prices show. The measure is headed for its lowest close since Aug. 29, 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 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. A basis point is 0.01 percentage point.
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