ASIA CREDIT DAYBOOK: HY Sales May Drop More This Yr, Lucror Says

11 Jan, 2016

By Annie Lee
     (Bloomberg) -- Asian HY supply is expected to remain weak in 2016, possibly even below the 2015 mark, says Charles Macgregor, head of Asia at Lucror Analytics in a note yday.

  * Macgregor expects negative sentiment to impact financing for
    commodities cos.; cos. in countries with weak technicals
    such as India and Indonesia may also face difficulties
    tapping offshore mkt
    * “We expect more capital outflows from EM nations, which
      may further stress Asian HY credits with a large local
      currency and USD borrowing exposure”
  * NOTE: Asian cos. sold $21b HY bonds last yr, $10b less than
    record high reached in 2014: Bloomberg data
  * Nippon Life started investor meetings yday
  * Asia USD/EUR Bond Pipeline
  * China Bond Pipeline
  * S&P 500 futures +0.1% to 1,914.20 as of 7:23am in Hong Kong;
    cash closed +0.1% at 1,923.67
  * Brent Crude -6% to $31.55/bbl
  * Treasuries were mixed in late trading yday; 5Y-30Y yields
    higher by as much as 4.5bp (30Y), shorter maturities little
    changed
    * 10Y yield rose from lowest closing level since Oct. 28,
      30Y from lowest since Dec. 11, ahead of 3Y/10Y/30Y
      auction cycle, and possible IG credit offerings
      postponed during last week’s risk-asset selloff
    * IG calendar is expected to include InBev financing for
      SABMiller purchase that may set record for size
    * 2Y yield declined for sixth straight session and at
      0.924% in late trading was below closing levels since
      Dec. 11, as weakness in European and U.S. stocks and
      oil-led commodity selloff eroded confidence in outlook
      for a second Fed rate increase in March
    * 5/30 curve steepened, topping its 200-DMA for first time
      since Nov. 19
  * Jan. 11 closing levels:
    * 2Y -0.01bp to 0.9317%
    * 3Y +1.08bps to 1.1872%
    * 5Y +3.42bps to 1.5939%
    * 7Y +4.05bps to 1.9419%
    * 10Y +5.98bps to 2.1754%
    * 30Y +5.88bps to 2.9682%