Credit Market Watch: Summary for week ending 30-Oct

Credit Market Watch: Summary for week ending 30-Oct

·         MYR Credit:

Ø  MYR credit market saw higher volumes although investors seemingly turn a bit cautious after the hawkish FOMC statement. Quasis and AAAs from short end to belly saw most action and with increased interest in longer tenors. 

Ø  Danainfra opens book today to raise up to MYR3b including private placement. Pricing should in the region of MGS+35 to 40bps for 7y and 10y, and MGS+40 to 45bps for 15y and 20y, broadly along our quasi-govvy fitted curve.

Ø  Updates: First Resources' rating was reaffirmed at AA2/stable by RAM which expects higher FFB production and yield to sustain FFODC above 0.3x over time.

Ø  Relative value: Rantau'22 appear to offer value for a 9y AAA paper. YTL Power'24 looks attractive having some yield pickup over SEB'24 and last traded 10bps above our fitted line.

·         Asian USD Credit:

Ø  UST curve bear-flattened as front end yields underperformed on higher odd of FFR hike in Dec. Asian credit was overall firmer with JACI composite -9bps, JACI IG -8bps and JACI HY -14bps.

Ø  Sovereigns, however, were the underperformer led by INDONs which traded 15 to 25bps wider WoW, while PHILIPs +5 to 10bps, MALAYSs and KOREAs about +5bps WoW. OGIMK'23 moved tighter WoW.

Ø  IG names generally were still in demand, though there were more sellers late last week on tech and O&G names. China Clean Energy Devt. (Baa1/-/A+), a wholly owned subsidiary of China General Nuclear Power Corp.,  priced its 10y USD500m at +197.5bps which tightened a tad.

Ø  Rating changes: Beijing Capital Land's rating was upgraded to BB+ from BB by Fitch, citing stronger linkage to parent Beijing Capital Group despite its weaker standalone credit. Meanwhile, Glorious Property's rating was raised to Caa2 from Caa3 by Moody's, citing easing of imminent refinancing risks after refinancing its USD notes but with a negative outlook on continuing liquidity stress.

·         CDS: 5y CDS spreads in the region was pretty much flat WoW except Indonesia which widened 9bps to 224bps.