First Pacific Markets Bond Sale as Manulife Predicts Record Year
First Pacific Co. (142) is marketing a sale of U.S. dollar-denominated notes as offerings this year are expected to reach a record, according to Manulife Asset Management. Debt risk in Asia fell for a third consecutive day.
The utilities and resources company controlled by billionaire Anthoni Salim is marketing 10-year bonds at about 4.75 percent, said a person familiar with the matter, who asked not to be identified because the details are private. China National Petroleum Corp. sold $2 billion of notes yesterday, the most for a company this year, data compiled by Bloomberg show.
Sales of dollar bonds in Asia outside Japan touched a record $44.9 billion in the first quarter, 26 percent more than the previous high in the three months ending March 31, 2012, Bloomberg data show. Speculative-grade offerings, rated lower than BBB- by S&P and Fitch Ratings Ltd. or the equivalent Baa3 by Moody’s Investors Service, surged to a record $14.5 billion.
“Consensus is building that 2013 will be another record year in terms of new issuance,” said Luc Froehlich, a Hong Kong-based portfolio manager with Manulife Asset Management’s Asia fixed-income team, which oversees more than $43 billion. “Analysts are adjusting their forecasts upwards to account for the rise in high-yield deals and the uptick in supply from first-time borrowers.”
China Vanke Co., China Railway Group Ltd. and AIA Group Ltd. all sold inaugural securities in the U.S. currency this year, Bloomberg data show.
Megaworld Corp. is offering 10-year dollar bonds at about 4.5 percent, a person familiar with the matter said. Korea National Oil Corp. is planning meetings with fixed-income investors next week.
First Pacific is expected to sell about $300 million of notes in what would be its first dollar sale in nine months. Philippine Long Distance Telephone Co., the country’s biggest phone company, is a unit of First Pacific and the company also has stakes in Philex Mining Corp. and Metro Pacific Investments Corp., which has assets in the power, water, toll-road and health care sectors.
The Markit iTraxx Asia index of 40 investment-grade borrowers outside Japan declined 1 basis point to 116 basis points as of 8:10 a.m. in Hong Kong, Royal Bank of Scotland Group Plc prices show. The gauge is poised for its lowest close since March 19, according to data provider CMA.
The Markit iTraxx Japan index decreased 0.5 of a basis point to 91.5 as of 9:13 a.m. in Tokyo, according to Citigroup Inc. prices. The benchmark is headed for its lowest close since Nov. 22, 2010, 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 was little changed at 114.5 as of 10:09 a.m. in Sydney, according to Westpac Banking Corp. prices. The measure has ranged from 102.3 basis points and 127.5 basis points this year, CMA prices show.
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.
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