Korea may sell dollar and euro bonds

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Korea may sell dollar and euro bonds

Korea is considering a sale of dollar-and euro-denominated bonds amid the best start to a year for sovereign debt since 2009.

Asia’s fourth-largest economy plans to meet investors in the U.S. and Europe starting May 21 to discuss a possible offering, a person familiar with the matter said, asking not to be identified because the details are private. The Tokyo Metropolitan Government intends to price five-year dollar notes as soon as today, a separate person said

Sovereign bonds in the U.S. currency from the region outside Japan have gained 7.65 percent since Dec. 31, the best performance for this period in five years, according to JPMorgan Chase & Co. indexes. Indonesia, Pakistan, the Philippines and Sri Lanka have all sold debt in dollars since the end of 2013, data compiled by Bloomberg show.

Korea was the last Asian nation to sell more than 100 million euro ($138 million) of notes, in November 2006 raising 375 million euro via 4.25 percent securities that mature in 2021.

“Investors are likely to feel comfortable with Korean bonds,” Chris Park, a Hong Kong-based vice president and senior credit officer at Moody’s Investors Service, said. “The country has shown resilience despite the U.S. Fed’s tapering, compared with other emerging economies.”

Korea plans to meet investors in Boston on May 21, New York on May 22, Paris on May 23, Amsterdam on May 26, Frankfurt on May 27 and London on May 28, the person with knowledge of the deal said.

Tokyo Metropolitan is marketing its notes at 38 basis points more than mid swaps, the other person said.

Bharti Airtel, India’s biggest mobile phone operator, on Monday sold $1 billion of 5.35 percent 2024 notes at a spread of 270 basis points and 750 million euro of 3.375 percent 2021 securities, Bloomberg data show.

The cost of insuring Asia-Pacific corporate and sovereign bonds from default fell today, according to traders of credit-default swaps.

The Markit iTraxx Australia index lost 1 basis point to 89.5 basis points as of 10:20 a.m. in Sydney, according to Westpac Banking Corporation. The gauge is on course for a fifth day of declines, its longest streak of decreases since the period ended Dec. 24, according to data provider CMA.

The Markit iTraxx Japan index slid 1 basis point to 84 basis points as of 8:55 a.m. in Tokyo, Citigroup prices show. The measure is on track for its lowest close since April 18, according to CMA, which is owned by McGraw-Hill Cos. and compiles prices quoted by dealers in the private market.

Credit-default swap indexes are benchmarks for insuring bonds against default and traders use them to speculate on credit quality. A drop signals improving perceptions of creditworthiness, while an increase suggests the opposite.

Bloomberg


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