HONG KONG, Dec 19 (IFR) - Asian credit markets were quiet on Tuesday, but HNA Group's bonds stayed under pressure as concerns about the company's liquidity persist.

The iTraxx Asia ex-Japan IG index tightened by more than 1bp today to 68.5bp/69.5bp.

"Market activities will be muted in the rest of this month due to the Christmas holiday and year-end effect," said a fund manager.

He said the only exception is likely to be HNA Group, which may continue to see more price volatility and selling pressure due to headline risk.

The airlines-to-hotels conglomerate's 8.875% 2018s issued last month fell 0.75 point to a bid of 96.25. Its 6.25% bonds fell to 85.00/87.00 this morning but rebounded to 87.00/89.00 in the afternoon.

There was a media report that HNA Group is looking to sell more than US$6bn worth of overseas commercial properties.

Jiayuan International's 8.25% 2018s were flat. The Chinese property developer yesterday raised HK$1.4bn via a share placement.

CreditSights said an offshore bond supply glut from Chinese developers is looming next year as more developers turn to the offshore bond market to refinance amid rising onshore rates.

The research firm advises investors to hold a basket of defensive (BBB and BB rated) Chinese property bonds as part of their core portfolios and to add selective higher beta (B rated), shorter-dated credits for return enhancement.

Investment-grade credits in general were 1bp-2bp tighter with China Orient Asset Management's 4.375% 2027s seeing some buying flow and tighter by 2bp.

S&P today revised Orient Asset's BBB+ rating outlook to positive from stable as it expects the Chinese distressed-asset manager's leverage will improve over the next 12-24 months following a planned capital infusion from strategic investors over the next month or two. (Reporting by Carol Chan; Editing by Vincent Baby)