Sunac Offers Dollar Debt as Beijing Capital Bonds Trade HigherRachel Evans
Sunac China Holdings Ltd. is marketing a sale of U.S. dollar-denominated bonds as notes sold by fellow developer Beijing Capital Land Ltd. rose on their first day of trading. Bond risk in the Asia-Pacific region fell.
Sunac, based in Tianjin, China, plans to sell five-year securities at a yield of about 9.75 percent, a person familiar with the matter said. Debt sold by Beijing Capital Land that has no fixed maturity rose to 101 cents on the dollar as of 11:38 a.m. in Hong Kong after pricing yesterday at par, according to prices quoted by BNP Paribas SA and data compiled by Bloomberg. Citic Pacific Ltd. and Taiwan Semiconductor Manufacturing Co. also plan to sell U.S. currency bonds.
The cost of insuring Asian corporate and sovereign bonds against non-payment has fallen 2.3 basis points this week, on track for its biggest drop since the five-day period ending March 8, according to traders of credit-default swaps. Beijing Capital Land, a builder of luxury residential apartments, and Greentown China Holdings Ltd. raised $700 million yesterday in the first sales by Chinese real-estate developers in two weeks, data compiled by Bloomberg show.
“I do think we will see more supply after Easter,” said Mark Reade, a Hong Kong-based credit desk analyst at Credit Agricole CIB. “Most Chinese developers continue to have a strong appetite for U.S. dollar funding and as we make our way through earnings season, we’re sure to see more developers come to market.”
Asia-Pacific issuers have sold almost $3 billion of bonds in the U.S. currency this week, bringing sales this month to $23.9 billion, data compiled by Bloomberg show. That compares with $10.7 billion of issuance in the same period of February and $29.7 billion in January, the data show.
Greentown announced on March 24 that 2012 net income rose 88 percent to 4.85 billion yuan ($781 million) versus the previous corresponding period. The company sold more of its 8.5 percent notes due February 2018 yesterday at 102.5 cents on the dollar, according to data compiled by Bloomberg. The securities were trading at 102.7 cents as of 5:22 p.m. in Hong Kong, Bloomberg prices show.
Citic Pacific is offering seven-year debt at 6.375 percent, a separate person familiar with the matter said, also asking not to be identified because the terms aren’t set. Taiwan Semiconductor plans raise as much as $1.5 billion from a sale of three-year bonds at about 75 basis points more than Treasuries and five-year notes at an about 95 basis-point spread, according to Elizabeth Sun, a spokeswoman at the company.
SmarTone Telecommunications Holdings Ltd., which provides mobile telecommunication services in Hong Kong, is marketing 10-year securities at a yield premium of 210 basis points to 215 basis points, according to another person.
The Markit iTraxx Asia index of 40 investment-grade borrowers outside Japan decreased 1.5 basis points to 118.5 as of 8:21 a.m. in Hong Kong, Royal Bank of Scotland Group Plc prices show. The benchmark has ranged from 100.5 to 120.8 since Dec. 31, according to data provider CMA.
The Markit iTraxx Australia index slid 1 basis point to 119 as of 10:57 a.m. in Sydney, Westpac Banking Corp. prices show. The measure rolled to a new series on March 20 and closed at 121.1 on that day, 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 was little changed at 109 basis points as of 9:05 a.m. in Tokyo, according to Citigroup Inc. prices. The gauge has ranged from 101 to 148.1 this year, 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.