Business

Sun Jun 01 22:40:18 PDT 2008

HONG KONG, June 2 (Reuters) – Asian sovereign and corporate bond spreads were rangebound on Monday amid caution ahead of a heavy load of global economic indicators, including the widely anticipated U.S. employment data at the end of the week.

Inflation worries also continued to keep investors on edge.

Cash bonds from London-listed Vedanta Resources Plc were in focus as it is expected to sell debt to finance its $2.6 billion bid for the assets of bankrupt copper miner Asarco.

But Vedanta’s bonds were flat after its unit, Sterlite Industries, agreed on Saturday to buy the operating assets of the Arizona-based miner.

Analysts noted Sterlite may be unable to complete the acquisition given the opposition of copper miner Grupo Mexico, which owns Asarco but does not have board control.

Vedanta’s 6.625 percent cash bonds maturing in 2010 were traded at 100/102 to the dollar, virtually unchanged from Friday, though its spread over similar Treasuries moved out by 3 basis points (bps) to 276.

"The expectations are that Vedanta is going to find it hard to make this acquisition given Grupo Mexico is going to do whatever it can to block it. We are still at the very early stages of this," said a Singapore-based analyst at a major foreign bank who declined to be identified.

Overall trading volumes in Asian bonds were light ahead of economic data, including key U.S. manufacturing data due out later in the day that could give clues about the extent of a U.S. economic slowdown.

The iTRAXX Asia ex-Japan high-yield index a key measure of risk aversion, was quoted at 470 basis points (bps), rangebound from Friday’s levels.

A recent record-setting surge in oil prices has widened Asian spreads in the second half of May, raising the spectre of inflationary pressures at a time of slowing global economic growth.

U.S. crude futures edged down 24 cents to $127.11 a barrel in Asian trade.

Still, with spreads in the region still significantly below the record peaks seen in mid-March, Asian issuers are increasingly looking to sell new bonds.

Export-Import Bank of Korea (KEXIM) is considering selling about $1 billion in 10-year bonds, but is waiting for the best market conditions before launching the deal, said a source familiar with the plans.

FIVE-YEAR CREDIT DEFAULT SWAPS

Bid/Ask spread

Current Week ago Korea Dev Bank 90/~ 105/~ Hutchison 75/85 78/88 PCCW-HKT 98/112 83/~ China 45/54 43/~ Indonesia 250/~ ~/242 Korea ~/83 63/~ Malaysia 78/85 69/~ Philippines 222/237 ~/223

~no bid or ask spread For CDS prices double click on

ASIAN BENCHMARK DOLLAR BONDS

Coupon Maturity Bid price Bid spread

5-YEAR

——

DBS Bank 7.13 15-May-11 106.09 148

Malaysia 7.50 15-Jul-11 108.37 119

ICICI Bank 5.75 12-Jan-12 95.98 362

Petronas 7.00 22-May-12 108.39 126

Hutchison 6.50 13-Feb-13 103.33 227

Chartered Semi 6.25 4-Apr-13 96.30 376

Korea 4.25 1-Jun-13 97.82 134

United Overseas 4.50 2-Jul-13 95.03 223

PCCW-HKT 6.00 15-Jul-13 102.36 206

China 4.75 29-Oct-13 100.09 132

10-YEAR

——-

Hutchison 6.25 24-Jan-14 103.94 306

Korea 4.88 22-Sep-14 98.97 102

PCCW-HKT 5.25 20-Jul-15 94.12 223

Woori Bank 6.13 3-May-16 97.92 241

Penerbangan 5.63 15-Mar-16 105.51 74

Philippines 8.75 7-Oct-16 119.00 179

Indonesia 6.88 9-Mar-17 100.38 276

ICICI Bank 6.38 30-Apr-22 89.97 392

Petronas 7.88 22-May-22 123.52 140

(Reporting by Rafael Nam; Editing by Jacqueline Wong)

Provided by Reuters

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