Influx of new paper has Asian bonds weakening; Cinda sees action; IBK trades at reoffer

By Christine Van Dusen

Atlanta, April 17 – Asian bonds put in a weaker session on Friday as investors continued to digest new issues and cut back on exposure after the International Monetary Fund rejected a debt repayment extension for Greece.

“New issues are 1 basis point to 2 bps wider, while the rest of the high-grade space is unchanged to 3 bps wider,” a London-based trader said.

The new issue from Taiwan’s Formosa Plastics Group, which came to the market this week at a spread of 157 bps over Treasuries, was wider by 1 bp on Friday morning, while China-based Haitong International Securities Co. Ltd.’s new 3˝% 2020 notes that priced at a 220 bps spread ticked down.

The new $1.5 billion two-tranche issue of Islamic bonds due in 2025 and 2045 from Malaysia “held in unchanged,” he said, and the new 2020 tranche of 2.707% notes that Malaysia’s Petroliam Nasional Bhd. priced at a 110 bps spread moved lower.

The new two-tranche issue of $3 billion notes from China Cinda Asset Management Co. was active in trading on Friday morning, a trader said.

Overnight, Industrial Bank of Korea priced an upsized $700 million issue of 2% notes due in 2020 at a spread of Treasuries plus 75 bps, a market source said.

“Bonds traded up at 72, with onshore accounts adding at the break, but slowly leaked back to reoffer,” he said. “It was last 76 bps, 74 offered into London open.”

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