Brekkie Bond Wrap

Another relatively weak day in Asian credit with IG cash bond spreads 2-3 bps wider with the rally in UST and new supply pushing spreads wider. The tech space saw Tencent 5 wider , while BABA and BIDU were 2-3 bps wider. The new Haitong 5yr which priced at +217 traded as tight as 213 before closing 3 wider. Formosa Plastic 10yr which came at +157, finished 5 bps tighter than reoffer. The new MALAYS sovereign sukuk is seeing mixed performance on the break this morning with the 10yr last trading at +121 (priced at +115), while the 30yr fared better, last trading at +163 (priced at +170).

Focus in the HY market was on the reopening of the new issue space. The new CENCHI 21 traded to a high of 100.375 in the street before settling in the 100.20-100.35 for most of the day. With a USD3.5 bn book (USD300 mm issue size), it was a tad surprising that the bond did not trade higher. Berau bonds firmed up 1-2 points on news that Asia Coal Energy Ventures, funded by the Sinarmas Group, may offer to buy all of Asia Resource Minerals PLC, Berau’s parent.