SK Innovation sells high-flying dollar bonds

SK Innovation, the Korean oil refiner, sold dollar bonds because the nation’s corporate notes in the currency are among the leading gainers in Asia outside of Japan this month amid low supply.

Korean debt rose 0.23 percent since July 31, while Chinese notes climbed 0.26 percent, the top performers among Asia’s five largest markets, according to indexes compiled by JPMorgan Chase and Company.

SK Innovation on Tuesday sold $350 million of five-year securities, with bids exceeding the amount offered by almost eight times, said a person familiar with the matter.

Asia’s fourth-largest economy expanded 2.3 percent in the second quarter from a year earlier, up from 1.5 percent in the first three months of the year, official data showed last month.

The average yield on Korean bonds has fallen 44 basis points from a high in June to 3.16 percent, according to JPMorgan indexes.

“Credit spreads on Korean dollar bonds are narrowing as local companies have not increased their debt supply by a lot this year,” said Choi Jin-young, a fund manager at Mirae Asset Global Investments.

SK Innovation’s 2018 notes were quoted at 100.77 on the dollar, compared with the issue price of 99.683, according to Standard Chartered prices.

Elsewhere in the dollar bond market in Asia, Macquarie Bank is marketing three-year securities to yield 160 basis points more than Treasuries, a person familiar with the matter said, asking not to be identified because the terms aren’t set.

Bloomberg