Franshion Markets Dollar Debt After Busiest Sales Day in 3 WeeksRachel Evans
Franshion Properties China Ltd. is marketing dollar-denominated bonds after the busiest day for sales in the U.S. currency in Asia in almost three weeks.
The Hong Kong-listed property developer, which gets all its revenue from operations on the mainland, plans to sell five-year notes to yield about 5.875 percent, a person familiar with the matter said. Times Property Holdings Ltd., a builder based in Guangzhou, southern China, is also offering five-year securities, as is Nomura Holdings Inc., while Australia & New Zealand Banking Group Ltd. plans to sell 10-year bonds, separate people said today.
United Overseas Bank Ltd., Singapore’s third-largest lender, led $1.3 billion of bond sales by borrowers from Asia outside Japan yesterday, the busiest day since Feb. 20, according to data compiled by Bloomberg. Issuers are paying an average 263.7 basis-point premium for U.S.-currency debt, near the least in a year, according to JPMorgan Chase & Co. indexes.
“From a company perspective, funding costs are still quite cheap,” said Agnes Wong, a Hong Kong-based credit analyst at Nomura. “Given a lot of companies, particularly property developers, report their results in coming weeks, the market may become crowded with supply following results announcements, so it makes sense for those that can to come to market now.”
Some 30 companies in the Hang Seng Composite Index are due to release earnings this week, and more than 90 will do so next week, according to data compiled by Bloomberg.
United Overseas Bank sold 79 percent of its Basel III-compliant Tier 2 bonds, the first such notes to be issued by a Singapore bank, to Asian investors, a person familiar with the matter said today. ANZ plans to sell its own subordinated fixed-rate Tier 2 debt as soon as today, another person said.
Times Property is marketing its notes, which can be bought back by the company after three years, at about 12.875 percent, the person with knowledge of the details said. Nomura is considering pricing its senior unsecured bonds in the low to mid 130 basis point-area more than government debt.
Bank of America Corp., Citigroup Inc. and HSBC Holdings Plc are also helping to raise $275 million via bonds to fund Blackstone Group LP consortium’s acquisition of Pactera Technology International Ltd., a person familiar said. The sale will be discussed with investors in Hong Kong and Singapore this week and Europe and the U.S. the next, the person said.
The cost of insuring Asia-Pacific corporate and sovereign bonds from default increased today, according to traders of credit-default swaps.
The Markit iTraxx Asia index of 40 investment-grade borrowers outside Japan advanced 1.5 basis points to 127 basis points as of 8:42 a.m. in Hong Kong, Westpac Banking Corp. prices show. The gauge is set for its highest close since March 10, according to data provider CMA.
The Markit iTraxx Australia index added 1.5 basis points to 103.5 as of 11:28 a.m. in Sydney, according to ANZ. The gauge is on course for its highest close since March 3, according to CMA, which is owned by McGraw-Hill Cos. and compiles prices quoted by dealers in the privately negotiated market.
The Markit iTraxx Japan index advanced 0.5 of a basis point to 76.5 as of 9:33 a.m. in Tokyo, Citigroup prices show. The index is rising for a fourth day, the longest streak of gains since the period ending Jan. 8, CMA data show.
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.