Perusahaan Gas Meets Investors as Asia Dollar Bonds Extend Gains
Perusahaan Gas, the state-owned energy distributer, is slated to speak to investors in Asia, Europe and the U.S. about the possible offering from today, a person familiar with the matter said May 2. China Cinda Asset Management Co., one of four state-owned managers of soured loans, is due to conclude meetings about a possible sale in the U.S. currency tomorrow, a separate person said last week, asking not to be identified because the details are private.
Dollar bonds sold by Asian issuers returned 0.8 percent in April, a fourth month of gains, its longest stretch since the period ended December 2012, according to JPMorgan Chase & Co. indexes. Strong local appetite helped the region’s issuers sell a record amount of securities in the U.S. currency and is supporting that debt in the secondary market, according to Australia & New Zealand Banking Group Ltd.
“The impressive growth in demand from Asian and global institutional money to dollar Asia fixed-income, alongside the Asian private banks, has far outweighed any U.S. retail outflows,” analysts Victor Chow, Owen Gallimore and Nilani Murthy at ANZ wrote in a May 2 report. “New issuance has been focused in the more easily digested high grade product at attractive premiums to global peers.”
Asian issuers raised $36.3 billion of debt last month, the most on record, according to data compiled by Bloomberg. Globally, investment-grade companies pay 2.44 percent to sell bonds, according to Bloomberg indexes. Dollar debt sold by Asian borrowers yields 4.97 percent, JPMorgan indexes show.
Transfield Services Ltd., an Australian operations and maintenance services company, plans to sell $300 million of 5.5 year bonds as soon as today, a person with knowledge of the details said.
The cost of insuring Asian corporate and sovereign bonds from default was little changed today after touching a one-month high last week, according to traders of credit-default swaps.
The Markit iTraxx Asia index of 40 investment-grade borrowers outside Japan was quoted at 126 basis points as of 8:20 a.m. in Hong Kong, Standard Chartered Plc prices show. The measure rose to 128 basis points last week, the highest since March 28, according to data provider CMA.
The Markit iTraxx Australia index climbed 0.5 basis point to 95.5 basis points as of 10:15 a.m. in Sydney, according to National Australia Bank Ltd. The gauge fell as low as 94.6 basis points last week, the least since May 2010, according to CMA, which is owned by McGraw-Hill Cos. and compiles prices quoted by dealers in the privately negotiated market.
Japan is closed for public holidays today and tomorrow.
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.
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