Clifford Capital Markets Bonds as Asia Investors Await Fed Meet

Clifford Capital Pte, a Singaporean infrastructure finance provider, is the sole company marketing dollar-denominated bonds in Asia as investors await the outcome of a two-day Federal Reserve policy meeting starting today.

The lender to projects including power generation and water treatment is marketing five-year notes, said a person familiar with the matter. The company, in which state-owned Temasek Holdings Pte is the biggest shareholder with a 40.5 percent stake, is offering the securities to yield 57 basis points to 60 basis points more than Treasuries, the person said. Beijing-based developer Modern Land China Co. sold $150 million of 13.875 percent notes yesterday, Bloomberg-compiled data show.

Yields on dollar notes in the region outside Japan dropped to a four-month low of 5.039 percent on Oct. 24 and remain near that level at 5.05 percent, JPMorgan Chase & Co. indexes show. Investors are watching for clues as to whether the Fed will delay scaling back asset-buying stimulus after U.S payrolls rose less than expected last month and the 16-day government shutdown shaved at least $24 billion off the world’s largest economy.

“This week is expected to be relatively quiet, probably partly because of the FOMC meeting,” said Joep Huntjens, Singapore-based head of Asian debt at ING Investment, which manages about $230 billion globally. “However, investor meetings are continuing this week and next week more primary market activity is expected.”

State Guarantee

Clifford Capital’s offering will be guaranteed by the Singapore government, the person said today, asking not to be identified because the terms aren’t set.

The U.S. central bank is likely to delay reducing its $85 billion in monthly bond purchases until March, according to a Bloomberg News survey of economists conducted Oct. 17-18.

The Markit iTraxx Australia index rose 1 basis point to 106.5 as of 11:24 a.m. in Sydney, according to National Australia Bank Ltd. prices. The gauge has fallen from 125.2 at the end of September and is poised for its first monthly decline since July, according to data provider CMA.

The Markit iTraxx Asia index of 40 investment-grade borrowers outside Japan was little changed at 133 basis points as of 8:25 a.m. in Hong Kong, Australia & New Zealand Banking Group Ltd. prices show. The benchmark has slipped from 156.4 basis points on Sept. 30 and is set for a second monthly drop, 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 87.25 basis points as of 9:26 a.m. in Tokyo, according to Citigroup Inc. prices. The measure has fallen from 97.3 at the end of September and is on track for its largest monthly drop since April, 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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