Fantasia Markets Dollar Bonds as China’s Yields at One-Month Low
The Shenzhen-based property developer is offering a five-year note at a yield of about 11 percent, said a person familiar with the matter, asking not to be identified because the terms aren’t set. Yields for Chinese borrowers in the U.S. currency were at 5.912 percent yesterday, little changed from the one-month low of 5.909 percent touched on Jan. 13, according to JPMorgan Chase & Co. indexes.
Builders have comprised almost half of the 22 issuers of dollar bonds in the Asia-Pacific region outside Japan this year, with Fantasia the 10th to approach the market, according to data compiled by Bloomberg. China has restricted property developers from issuing domestic bonds since 2010 as part of efforts to curb price gains and living costs.
“Chinese property developers are some of the biggest seekers of debt capital in Asia,” said Hemant Dharnidharka, Bangalore-based head of credit research at SJS Markets Ltd. “These companies have accumulated plenty of debt on their books to fund expansion in China’s boom years and are now mostly looking to refinance via dollar bond sales at cheaper costs.”
Hong Kong-based developers Wharf Finance Ltd., controlled by billionaire Chairman Peter Woo, and China Overseas Grand Oceans Group Ltd. both sold $400 million of securities each yesterday, according to Bloomberg-compiled data.
Korea Gas Corp. hired banks to arrange meetings with fixed-income investors during the week of Jan. 20, a person familiar with the matter said today. India’s Bank of Baroda priced $750 million of five-year debentures at 325 basis points more than Treasuries yesterday and Korea National Oil Corp. sold $1 billion of debt, Bloomberg-compiled data show.
The cost of insuring corporate and sovereign bonds against non-payment in the Asia-Pacific region fell today, according to traders of credit-default swaps.
The Markit iTraxx Asia index of 40 investment-grade borrowers outside Japan decreased by 2 basis points to 139 basis points as of 8:58 a.m. in Hong Kong, Standard Chartered Plc prices show. The gauge, set to fall for a second consecutive day, is down from a three-month high of 141.1 basis points on Jan. 14, according to CMA data.
The Markit iTraxx Japan index declined by 2.5 basis points to 74.3 basis points, according to Citigroup Inc. prices as of 9:41 a.m. in Tokyo. The measure touched 78.7 basis points on Jan. 14, the highest since Dec. 6, according to data provider CMA, which is owned by McGraw-Hill Cos. and compiles prices quoted by dealers in the private market.
The Markit iTraxx Australia index slid by 2 basis points to 99 as of 11:38 a.m. in Sydney, Westpac Banking Corp. prices show. The benchmark peaked at 101.4 basis points this week, the highest since Dec. 17, 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.
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