Bloomberg News

France’s Axa Plans Dollar Bond as Bond Sales Hit Six-Month High

January 10, 2013

Axa SA (CS) and Yuexiu Property Co. plan to meet investors in Asia about possible U.S. dollar-denominated notes as weekly sales in the Asia-Pacific region rose to a six- month high. Bond risk in the region fell.

Axa, Europe’s second-largest insurer and Yuexiu, a Hong Kong-listed property developer, are planning Reg S dollar bonds, according to people familiar with the matter. Agile Property Holdings Ltd. (3383), a realtor based in Guangzhou, southern China, is marketing perpetual securities at about 8.375 percent. Hong Kong Broadband Network Ltd. is offering five-year bonds to yield 5.25 to 5.375 percent, people familiar with the matter said.

Average yield premiums on dollar bonds in Asia slid to a 20-month low of 245 basis points more than Treasuries this week, according to JPMorgan Chase & Co. indexes. Asia-Pacific bond sales have surged to $12.7 billion, the most for any week since the one ended July 15, Bloomberg-compiled data show.

“The year end was punctuation and now deals just resume,” said Edwin Chan, the head of Asian credit research at UBS AG. “Low interest rates are certainly one enticement for corporates to issue in the U.S. dollar universe and also demand draws supply.”

JG Summit Holdings Inc. (JGS), a Philippines conglomerate with interests in real estate, textiles and consumer foods, is also planning a U.S. dollar bond sale, and hired Citigroup Inc., Credit Suisse Group AG and HSBC Holdings Plc to arrange the transaction, according to a company stock exchange disclosure.

Default Swaps

The Markit iTraxx Asia index of 40 investment-grade borrowers outside Japan retreated one basis point to 103 basis points as of 8:17 a.m. in Hong Kong, according to Royal Bank of Scotland Group Plc prices. The measure has declined 10 basis points this year, after falling 93 basis points in 2012, according to data provider CMA.

The Markit iTraxx Japan index fell three basis points to 135 as of 9:23 a.m. in Tokyo, Citigroup prices show. The benchmark is on track for its lowest close since August 2011, according to CMA, which is owned by McGraw-Hill Cos. and compiles prices quoted by dealers in the privately negotiated market.

The Markit iTraxx Australia index decreased one basis point to 112 as of 11:13 a.m. in Sydney, according to Westpac Banking Corp. prices. The gauge has fallen 15.5 basis points since Dec. 31, extending a 53 basis-point drop in 2012, CMA data show.

Credit-default swap indexes are benchmarks for insuring bonds against default and traders use them to speculate on credit quality. A drop signals improving perceptions of creditworthiness, while an increase suggests the opposite.

The swap contracts pay the buyer face value in exchange for the underlying securities if a borrower fails to meet its debt agreements.

To contact the reporters on this story: Tanya Angerer in Singapore at tangerer@bloomberg.net; Rachel Evans in Hong Kong at revans43@bloomberg.net

To contact the editor responsible for this story: Shelley Smith at ssmith118@bloomberg.net


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