Fixed Income Daily Market Update

CMBI Credit Commentary Fixed Income Daily Market Update固定收益部市场日报 We saw better selling on front-end of Chinese financials/Thai T2s/FRNs thismorning.AMs and institutions continued to buy USD onshore AAA-guaranteed LGFV issues yielding 6-7%. KNMIDI 26/FZSZJJ 27 rose 1.3pts.ACPM 4.85 Perp/CSCHCN 27 were 0.4-0.5pt lower. Glenn Ko, CFA高志和(852) 3657 6235glennko@cmbi.com.hk LASUDE:CCB Tower disposal notably improves LSD’s financial flexibility inrefinancing.LASUDE 26 rose 6.4pts this morning. See below. Cyrena Ng, CPA吳蒨瑩(852) 3900 0801cyrenang@cmbi.com.hk Indonesia plans to impose a 1% to 5% export tax on coal in 2026 to helpincrease state receipts. The proposed duties may vary according to coalgrades.The policy is expected to increase state receipts by IDR20tn(cUSD1.2bn). Yujing Zhang张钰婧(852)3900 0830zhangyujing@cmbi.com.hk Trading desk comments交易台市场观点 Yesterday,the new BNP 6.875 Perp was unchanged from RO at par amidtwo-way flows among PBs. The new MINMET 4.25 Perp and MINMET 4.35Perp also closed unchanged from RO at par. Japanese AT1s and insurancesubs leaked 0.1pt as the JPY weakened, whilst Yankee AT1s and insurancesubs were muted beyond small PB selling and small buying from Asian AMs.PBs and global funds continued to offload FRN paper from Middle Eastern,European, Australian and Japanese banks. We saw better selling on 2-5yrBABA/HAOHUA and 5-10yr MEITUA. They were 1-4bps wider. LASUDE 26edged 0.5pt higher.Lai Sun Development announced the sale of its 50%stakes in CCB Tower for net proceeds of HKD2.4bn. See comments below.FAEACO 12.814 Perp was 0.7pt higher. Far East Consortium announced thesale of its 50% stakes in Ritz Carlton Hotel in Perth, Australia, for AUD100mn(cUSD66.4mn). DALWAN 26s rose another 0.1-0.7pt. See our comments onDalian Wanda’s consent solicitation for a two-year maturity extension of thedue-Feb’26 bondyesterday.NANYAN 7.35 Perp was down by 0.6pt. InChinese/HK properties, LNGFOR 27-32 led the space and rose 0.9-1.2pts.Longfor’ssubsidiary Chongqing Longhu Enterprise Development proposedtoissue up to RMB5bn(cUSD707mn)corporate bonds.FUTLAN28/FTLNHD 26 were 0.1-0.8pt higher, while FTLNHD 27 was down by 0.1pt.VNKRLE 27-29 recovered 0.4-0.5pt. CSIPRO 28 was 0.5pt lower. In SEAsia,long-end PETMKs tightened 1-3bps. SMCGL Perps/MEDCIJ 26-30s were0.1pt lower to 0.2pt higher. GARUDA 31s/GLPSP 28 were up by 0.1-0.2pt.VEDLN 28-32s were unchanged to 0.3pt higher. InLGFV space,RMs continued to buy CNH and USD onshore-AAAguaranteed papers yielding 4% or higher. QDJZWD 6.95 03/31/28 edged0.7pt higher, while FZSZJJ 7 12/27/27 dropped 1.4pts. Last Trading Day’s Top Movers Marco News Recap宏观新闻回顾 Macro–S&P (-0.09%), Dow (-0.38%) and Nasdaq (+0.13%) were mixed on Tuesday. UST yield was higher onTuesday. 2/5/10/30 year yield was at 3.61%/3.78%/4.18%/4.80%. Desk Analyst Comments分析员市场观点 LASUDE:CCB Tower disposal notably improves LSD’s financial flexibility in refinancing The CCB Tower disposal will notably improve Lai Sun Development (LSD)’s financial flexibility of refinancingthe maturing USD bonds.LSD’s sole USD bond,LASUDE 26ofUSD493mn, will be due in Jul’26.The netcash inflow of HKD2.4bn (cUSD308mn)net cash inflow from the disposal would cover c62% of the principalamount of the bond.At 77.8, LASUDE 26 is trading at 50.5% YTW. We view the current valuation is pricing ina potential consensual LME with partial upfront repayment and a maturity extension. LSD has agreed to sell its entire 50% stake in CCB Tower in Central, Hong Kong for HKD3.5bn (cUSD450mn),implying an average valuation of cHKD31k per sq.f.The consideration represented a 6.7% discount to theHKD3.75bn independent valuation as of 31 Jul’25, and covers 12 of the tower's 27 floors and a number ofparking spaces, with the remaining 50% stake in the tower continued to be held by CCB international. Thetransaction is expected to generate net cash proceeds of HKD2.4bn for LSD, with completion targeted forJan’26 pending shareholder approval. As per media report, the buyer is a subsidiary of JD. The disposal is in line with LSD’s plan of monetizing assets toaddress debt maturities. That said, CCB Toweris one of LSD’s highest quality IPs which provides stable, recurring rental income from a prime location officeasset in Hong Kong.Monetizing this core asset strengthens its liquidity profile and supports thenear-termcredit profile, but it will lower LSD’s revenue resilience and recurring cash flow over the longer term, leavingLSD to be more dependent on IPs in less prime locations such as Cheung Sha Wan Plaza and Lai SunCommercial Centre in Lai Chi Kok, as well as more volatile cash flows from property developments. No Offshore Asia New Issues Pipeline Today News and market color Regardingonshore primary issuances, there were 113 credit bonds issued yesterday with an amount ofRMB111bn. As for month-to-date, 641 credit bonds were issued with a total amount of RMB611bn raised,representing a 15.2% yoy increase[ARAMCO]Saudi Aramco and E