Noble Dollar Bonds Add to Hong Kong’s Busiest Quarter in a Year

Noble Group Ltd., Asia’s biggest listed commodity supplier, is marketing dollar-denominated bonds, adding to Hong Kong borrowers’ busiest quarter of sales in the U.S. currency since the three months ended March 2012.

Noble Group, based in Hong Kong, is offering five-year notes at a yield premium of about 310 basis points more than Treasuries, according to a person familiar with the matter, who asked not to be identified because the terms aren’t set. Issuers in the city have sold $7.95 billion of notes this year, the most since $9.63 billion in the first quarter of 2012, according to data compiled by Bloomberg.

Wheelock & Co., a Hong Kong property developer, was the latest to issue dollar notes, raising $500 million in a sale of 3 percent securities on March 11, the data show. Dollar borrowing costs in Hong Kong were little changed at 3.44 percent yesterday, 78 basis points less than a year ago, according to HSBC Holdings Plc indexes. Yields in Asia have fallen 62.5 basis points over the same period to 3.63 percent, the indexes show.

“Although issuance has slowed after a really busy January, Asia’s bond market has had a very active first quarter and Hong Kong corporates are part of that,” said Shankar Narayanaswamy, the Singapore-based global head of credit strategy at Standard Chartered Plc. “It’s a trend you see across the board as there is more reliance on capital markets rather than loans.”

Noble Group, which is listed in Singapore, last publicly sold dollar notes in October 2010 when it issued $350 million of 8.5 percent perpetual bonds, Bloomberg data show. The company has the equivalent of $3.51 billion of notes outstanding.

Falling Loans

Sompo Japan Insurance Inc. hired banks to arrange a series of investor meetings in the U.S., Europe and Asia, with a dollar offering possibly following, a person familiar with the matter said today.

Syndicated loan volumes in the Asia-Pacific region outside Japan total $35.9 billion this year, 17 percent less than the $43.1 billion of facilities signed the same period of 2012, according to data compiled by Bloomberg.

The Markit iTraxx Asia index of 40 investment-grade borrowers outside Japan climbed 2 basis points to 103 basis points as of 8:15 a.m. in Hong Kong, Australia & New Zealand Banking Group Ltd. prices show. The measure is headed for its highest close since March 7, according to data provider CMA.

Credit Risk

The Markit iTraxx Australia index increased 2 basis points to 106 as of 11:18 a.m. in Sydney, according to Westpac Banking Corp. prices. The gauge is headed for its first rise in eight business days after closing yesterday at its lowest since May 2011, according to CMA, which is owned by McGraw-Hill Cos. and compiles prices quoted by dealers in the private market.

The Markit iTraxx Japan index advanced 0.5 of a basis point to 99.75 as of 9:11 a.m. in Tokyo, Citigroup Inc. prices show. The benchmark, which reached a high this year of 148.1 basis points on Jan. 4, is set for its first increase since Feb. 26, 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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