Axis and Kogas price amid challenging market

The pipeline is bursting at the seams and there has already been a large amount of new debt issued in Asia since the beginning of October, putting some pressure on the market. And this week is no exception. Early Wednesday morning Korea Gas and Axis Bank each sold $500 million of investment-grade debt.

The bonds performed relatively flat in the immediate aftermarket. However, taking into account that markets had turned south at the beginning of this week with equities down 1% in Europe on Tuesday and the Asia IG and Asia sovereign indices both opening 1 point wider yesterday, a flat first day of trading wasn’t a bad start.

The market was “having a little bit of a tantrum”, as one banker put it. Plus investors are dealing with an overwhelming amount of new supply.

Korea Gas was first to hit the market with its 10-year 4.25% semi-annual bonds, which are set to mature on November 2, 2020. The notes were priced below par to yield 4.312%, which is equivalent to a spread of 170bp over the 10-year US Treasury yield.