ASIA CREDIT CLOSE: Weaker market tone as Chinese equities plunge

SINGAPORE, July 27 (IFR) - Asian high yield was around half a point lower this afternoon and the regional iTraxx investment-grade index 3bp wider at 111bp/112bp, as Chinese equities tumbled more than 8%.

This saw Chinese sovereign CDS widen 4bp, though other sovereigns were also affected.

The cost of protection for Malaysian sovereign credit widened 6bp to 139bp/146bp as the ringgit touched a new low, while Indonesia and Korea also weakened 5bp and 4bp, respectively.

1Malaysia Development's 2023s fell more than half a point to 85.8/86.1 as the country's political noise showed no sign of abating.

Sritex's 2019s were yielding 80bp more than at Friday's close, having surged to 12.1% bid after the company confirmed it planned to raise up to USD420m in the offshore bond market.

Trung Nguyen of Lucror Analytics wrote that the SRILIJ'19s were due to weak corporate governance, aggressive pace of expansion and capital raising, short listing record, and evolving business profile.

Nguyen noted that the majority of proceeds would probably go to the Indonesian textile company's power plant construction business.

Greentown China's 2018s were nearly half a point lower at 105.8, and its 2019s down half a point at 106.8, after the developer gave price guidance at least 5.875% for a proposed new 5-year issue as part of an exchange offer.

Shanshui Cement's 2020 notes were unchanged at 82.9/84.2, after the Hong Kong High Court prevented its receivers from holding a vote on replacing most of the board of the company.

(Reporting by Daniel Stanton; editing by Dharsan Singh)