Bloomberg News

Bharti Airtel, Krung Thai Market Dollar Bonds in Asia With Swire

March 04, 2013

Bharti Airtel Ltd. (BHARTI), Krung Thai Bank Pcl (KTB) and Swire Properties Ltd. (1972) are marketing U.S. dollar- denominated bonds, the first offerings in the currency in Asia this month. Bond risk was little changed.

India’s largest mobile-phone operator Bharti Airtel, controlled by billionaire Sunil Mittal, is selling 10-year notes to yield about 5.5 percent, according to a person familiar with the matter, who asked not to be identified because the terms aren’t set. Thailand’s second-largest bank by assets is marketing a 5 1/2-year security to pay about 175 basis points more than Treasuries and Swire, the owner of Pacific Place shopping mall in Hong Kong, is selling seven-year debt at a spread of about 175 basis points, according to other people familiar with the offerings.

Issuance in Asia, outside of Japan, slumped 82 percent to $4.25 billion last month as markets closed across the region for Lunar New Year holidays, amid volatility in Treasury notes and as companies paused sales to report earnings. Yield premiums on dollar debt in the region matched a one-month high of 271 basis points more than Treasuries on March 1, according to JPMorgan Chase & Co. indexes.

“We are already slowly starting to see an increase in bond issuance this month,” said Gene Cheon, head of Asia credit research at Deutsche Bank AG. “This increase in issuance may however be tempered by some corporates waiting for earnings season to finish before coming to market.”

Average yields for Asia’s companies fell 141 basis points in the past 12 months to 3.86 percent last week, compared with an 82 basis-point decrease to 2.6 percent globally, according to Bank of America Merrill Lynch indexes.

Bond Risk

The Markit iTraxx Asia index of 40 investment-grade borrowers outside Japan was little changed at 109 basis points as of 8:22 a.m. in Hong Kong, Royal Bank of Scotland Group Plc prices show. The gauge rose 1.1 basis point in the five days to March 1, its first weekly increase in a month, 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 was also little changed at 115.5 as of 11:24 a.m. in Sydney, according to Westpac Banking Corp. (WBC) The index rose 5.8 basis points last week, its biggest one-week increase since November, according to CMA.

The Markit iTraxx Japan index decreased 2 basis points to 121 basis points as of 9:24 a.m. in Tokyo, Citigroup Inc. prices show. The index is on track for its lowest close since Feb. 14, according to data provider CMA.

Credit-default swap indexes are benchmarks for protecting 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. A basis point is 0.01 percentage point.

To contact the reporter on this story: Tanya Angerer in Singapore at tangerer@bloomberg.net

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


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