Woori Bank pushing dollar bondsWoori Bank and Bangkok Bank are marketing U.S. dollar-denominated bonds as investors slow their withdrawal of inflows to the region after the Federal Reserve’s announcement it won’t taper stimulus just yet.
Seoul-based Woori Bank is offering five-year notes at a spread of about 175 basis points more than Treasuries, a person familiar with the matter said. Thailand’s largest lender by assets is marketing similar-maturity debentures at a spread of about 205 basis points, and 10-year debt at about a 250 basis-point spread, another person said.
Investor sentiment toward Asia is shifting after the U.S. central bank’s decision last week to continue its $85 billion a month asset buying. Redemptions of emerging market bond funds last week were the lowest in 16 weeks while flows into China bond funds reached a 15-week high, according to EPFR Global.
The extra yield investors demand to hold corporate and government bonds in Asia versus government debt fell to a seven-week low of 303 basis points on Monday, HSBC Holdings indexes show.
“The Fed not tapering this month has given temporary relief to companies seeking to sell dollar bonds,” said Mahendra Jajoo, Pramerica Asset Managers Pvt.’s Mumbai-based chief investment officer, who manages some $500 million of assets. “Although the environment is better than before for new issuance, there’s still uncertainty about how soon the Fed will start reducing the amount of its bond purchases.”
Woori Bank last sold dollar bonds in April 2011, Bloomberg-compiled data show.
Those $500 million of 5.875 percent notes due 2021 were yielding 4.33 percent yesterday and trading at 109.85 cents on the dollar.
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