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Emerging Debt-Asian spreads firm, Hyundai Motor bonds tighten

HONG KONG, Dec 17 (Reuters) - Asian dollar bond spreads were mostly firmer in light trade on Wednesday morning, but Hyundai Motor Company's new bonds tightened about 12 basis points from their initial pricing level.

Hyundai Motor , South Korea's top automaker, sold US$400 million of five-year bonds overnight at a spread of 212 bps over Treasuries via lead manager Goldman Sachs.

The bonds, which have been rated BB-plus by global ratings agency Standard & Poor's, were trading at 205/195 bps over Treasuries.

The company raised the size of the offering from US$300 million and narrowed the price guidance from the initial 215 basis points over Treasuries due to strong investor demand.

Hyundai Motor needed the funds to part-finance construction of a US$1.1 billion auto plant in the United States.

The 5.30 percent coupon bonds were priced at 99.753 to yield 5.375 percent, Goldman said.

In the broader market, trade was quiet as liquidity dried up ahead of the Christmas holidays with many traders on leave.

"Basically, everything is sideways," said a trader at a European bank in Hong Kong. Spread movements tended to be exaggerated, he said.

"Spreads are a bit sensitive because liquidity is very low right now," the trader said.

Philippine five-year credit default swaps -- a form of insurance contract that protects bondholders from an issuer default -- tightened about 10 bps on the bid side, and were quoted at 435/470 bps.

Traders said there was little activity on the cash bond side.

"We've seen very few trades this morning," said a trader in Manila.

Philippine sovereign bonds due in 2014 were about three bps wider in spread terms at 428 bps over Treasuries, while the ROP '25s were virtually unchanged at 453 bps over.

Hutchison Whampoa's bond due in 2013 were trading a couple of bps tighter at 169/163 bps over.

Traders said Malaysian paper was now looking attractive on a relative value basis, after Korean spreads tightened as much as 20 to 25 bps over the past month for sovereign issues.

"Malaysia's looking cheap. We have seen buying interest on the cash bonds on the Malay '11 and the Petronas '12," said a trader in Hong Kong.

Malaysian sovereign bonds due in 2011 were trading at 38/32 bps over Treasuries, roughly unchanged from Tuesday's level, while the Petronas 12 was trading about five bps tighter at 70 bps over.

FIVE-YEAR ASIAN CREDIT DEFAULT SWAPS ISSUE BID SPREAD ASK SPREAD KOREA DEV BK 71 75 HUTCHISON 82 86 PCCW-HKT 77 86 KOREA 52 52 PHILIPPINES 445 470 MALAYSIA 37 47 CHINA 28 35

(For live CDS prices double click on )

ASIAN BENCHMARK DOLLAR BONDS ISSUE COUPON MATURITY BID PRICE BID SPREAD CHINA 6.8 23-May-11 114.32 26 KOWLOON CANTON 8 15-Mar-10 119.71 14 MAS TRANSIT RLWY 7.5 08-Nov-10 117.55 29 HUTCHISON CORP 7 16-Feb-11 109.91 109 PCCW-HKT 7.75 15-Nov-11 116.51 96 KOREA DEV BK 5.5 13-Nov-12 103.36 80 MALAYSIA 7.5 15-Jul-11 118.19 40 TENAGA NAS BHD 7.63 01-Apr-11 116.12 74 PETRONAS 7 22-May-12 111.76 103 PHILIPPINES 9.38 18-Jan-17 106.50 432 PHILIPPINES 9.875 16-Mar-10 109.81 363 DBS BANK 7.125 15-May-11 114.71 52 SINGAPORE TELE 6.375 01-Dec-11 109.56 69

*Spreads are as of previous ISMA close