Indonesia: Asia High Yield Bond Index and more

German insurer Allianz saw its dollar-denominated 3.875% perpetuals  fall about 5 points late on Monday after the 30-day call announcement window closed, indicating that the issuer will not be redeeming the bonds on the first call date of March 7. The fixed-for-life perpetuals (Term of the Day, explained below) fell 4.7 points this week thus far to currently trade at 93.85 cents on the dollar, yielding 4.13%. A senior syndicate banker told IFR, “There is a long, long track record of issuers making a call based on economics in the US dollar fixed-for-life market. This is not the first time this has happened. I’m quite amused, I can only infer from the price move that some people investing in the bond thought it was going to get called at the first call date, but I’m not sure why.” The bonds are now callable at any time and bankers expect the bond to move close to par once the dust settles, IFR reported.

US equity markets fell with the S&P and Nasdaq ending 0.4% and 0.6% lower. Sectoral gains were led by Energy, up 1.3% while losses were led by Communication Services, down 2.2%. US 10Y Treasury yields rose 3bp to 1.94%. European markets were higher with the DAX, CAC and FT SE up 0.7%, 0.8% and 0.8%. Brazil’s Bovespa closed 0.2% lower. In the Middle East, UAE’s ADX was up 0.1% and Saudi TASI closed 0.4% higher. Asian markets have opened mixed with HSI and Shanghai down 1.54% and 0.90% while STI and Nikkei are up 0.57% and 0.24% respectively. US IG CDS spreads were 0.4bp wider and HY CDS spreads were 3.1bp wider. EU Main CDS spreads were 1bp wider and Crossover CDS spreads were 7bp wider. Asia ex-Japan CDS spreads were 3.9bp wider also.