Morning Commentary: Asian bonds soften; Bluestar’s five-year notes see support; Woori Bank rebounds

By Christine Van Dusen

Atlanta, June 5 – Credits from Asia ended the week with a softer tone, with high-grade cash names unchanged to a couple of basis points wider on Friday morning, a London-based trader said.

“The rally in U.S. Treasuries kept accounts sidelined while we had some selling in recent issues,” he said.

Among those new issues was a repricing by Chaoyang, China-based chemical product manufacturer China National Bluestar Group Co. Ltd., which in May sold $1 billion in two tranches but on Thursday tried again due to a “contractual oversight,” a market source said.

The $500 million 3½% notes due in 2018 that had priced at a spread of Treasuries plus 220 bps was repriced at 99.893 to yield 3.538%, or Treasuries plus 250 bps. On Friday the notes moved to a tight of 272 bps before moving to 288 bps and closing the Asian session at 298 bps bid, 284 bps offered, the trader said.

The $500 million 4 3/8% notes due in 2020 that priced at Treasuries plus 235 bps were repriced at par to yield 4 3/8%, or Treasuries plus 270 bps.

“The five-year was better supported, with bonds reaching tights of 248 bps and closing at 260 bps bid, 255 bps offered,” he said.

Deutsche Bank, Morgan Stanley and BOC International were the joint global coordinators and – along with JPMorgan and BNP Paribas – the joint bookrunners and joint lead managers for the Regulation S deal.

The new issue from Korea’s Woori Bank – 5% Basel III Tier 1 notes due in 2045 that priced at par to yield 5% on Wednesday – hit a low of 98½ on Friday before rebounding to close, a trader said.

“Last seen at 98 7/8 bid, 99 1/8 offered,” he said.

Oil and gas bonds from China, meanwhile, moved 1 bp to 2 bps wider on Friday while senior notes from banks were a “touch softer but generally stable,” the trader said.

“Korea and Malaysia pulled back after the U.S. Treasury rally, with the 10-year bucket a couple bps wider,” he said. “India is a mixed bag.”

In other trading into the end of the week, sovereign bonds from Ukraine moved “a bit lower” after a “buying spree” at mid-week, said Fyodor Bagnenko, a fixed income trader at Dragon Capital.

Quasi-sovereign banks saw two-way flows, he said.

© 2015 Prospect News.
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