EM ASIA DEBT-Philippine PSALM bonds fall; Vietnam CDS widen

Published: 25 Nov 2009 21:03:48 PST

HONG KONG, Nov 26 - Dollar bonds issued this week by Philippine agency PSALM slipped for a second day as investors took profits, while the cost of insuring Vietnam's debt rose after the country devalued its currency.

Most of the deals in the Philippines were still concentrated on the new PSALM bonds, traders in Manila said. PSALM or Power Sector Assets and Liabilities Management oversees the assets and debts of state-owned power producer Napocor.

PSALM's bonds due in 2024 were quoted at 101.25/101.75 cents on the dollar, down from Wednesday's 101.75/102.125, local traders said. The bonds, seen as the last global debt issue from the Philippines this year, were sold at par on Monday.

The Philippines' 5-year credit default swap (CDS) <PHGV5YUSAC=R> widened by 2 basis points (bps) to 182.

"Philippine investors have already made good money on PSALM, so it's time to take profit," one trader said. "Some of them are lightening up on their holdings as the year-end approaches."

Traders expect the Philippines, one of Asia's most frequent sellers of debt overseas, to return to the international debt market as early as in January to help fund spending and pay debt in 2010.

A report that two of Dubai's flagship firms planned to delay repayment on billions of dollars of debt also hurt sentiment on Philippine and other Asian credits, traders said. [ID:nGEE5AO2L1]

"I heard about Dubai," one trader in Hong Kong said. "There's certainly a flight risk for Asian markets. But that's more of a spill-over risk."

The Asia ex-Japan iTraxx investment-grade index <0#ITAIGMPBMK=> was 2 bps (bps) wider at 112/114, traders from Hong Kong said.

"Some of the Asian investors are also holding Dubai debt, so there's possibly some selling pressure here," a credit analyst from Singapore said.

Vietnam's 5-year CDS <VNGV5YUSAC=R> widened by about 10 bps to 220, after the country devalued its currency. [ID:nBKK78305]

LATEST MAJOR RATING ACTIVITY IN ASIA (EXCLUDING JAPAN) >Fitch affirms Taiwan's Cathay No. 2 REIT; otlk neg [ID:nWNA8901]

For history on TRX Emerging Asia Index click on -- http://credit-content.session.rservices.com/reddatabase/TopRed.a sp FIVE-YEAR CREDIT DEFAULT SWAPS

Bid/Ask spread

Current Week ago

Korea Dev Bank 98.28* 98.16*

Hutchison 79.00* 76/80

PCCW-HKT 104.00* 100.77*

China 79.11* 74/78

Indonesia 198.64* 192/201

Korea 94.39* 93/97

Malaysia 95.11* 92/97

Philippines 178.64* 173/181

~no bid or ask

*midspread

For CDS prices double click on <REUTERSCDS>

For more bond prices click on <ASIASPREADS><ASIASPREADT> (Reporting by Jun Ebias; Editing by Tomasz Janowski) ((jun.ebias@thomsonreuters.com; +852 2843 6537; Reuters Messaging: jun.ebias.reuters.com@reuters.net; ))