Fixed Income Daily Market Update

CMBI Credit Commentary Fixed Income Daily Market Update固定收益部市场日报 LNGFOR 28 was 0.4pt higher this morning. ACPM 4.85 Perp dropped 1.1pts.SOFTBK 31-35s were 0.4-0.5pt lower. We saw mixed two-way flows onAAA-guaranteed USD LGFV issues yielding c7%. FZSZJJ 27 rose 1.3pts. Glenn Ko, CFA高志和(852) 3657 6235glennko@cmbi.com.hk FUTLAN/FTLNHD:The 10th tranche of CBICL-guaranteed bond.Wemaintain buy on FUTLAN/FTLNHDs. FTLNHD 27 was 1.3pts higher thismorning. See below. Cyrena Ng, CPA吳蒨瑩(852) 3900 0801cyrenang@cmbi.com.hk China Policy:Moderate stimulus in 2026. CMBI expects the PBOC willlikely cut RRR by 50bps andLPRs by 20bps in 2026; GDP growth tocontinue to slow in 4Q25 and 1Q26 before a possibly mild pick-up in 2H26with the full-year growth down from 5% in 2025 to 4.8% in 2026. See belowfor comments from CMBI economic research. Yujing Zhang张钰婧(852)3900 0830zhangyujing@cmbi.com.hk Trading desk comments交易台市场观点 Yesterday,investors were inclined to buy Perps/AT1s albeit light overall flowspostFOMC.CCAMCL 4.4 Perp edged 0.1pt firmer.CFAMCI 3.87529/CFAMCI3.375 30/CFAMCI 3.625 30 tightened 2-5bps.See ourcomments and recommendations on Chinese AMCsyesterday. TW lifersCATLIF/FUBON/NSINTW/SHIKONwere1-3bpswider.DALWAN26s/WESCHI 26-28 were unchanged to 0.2pt higher. Moody’s upgradedWest China Cement by one notch to B3 from Caa1 on substantial reductionin WCC's refinancing risk linked to WESCHI 26 post transaction. LASUDE 26retraced 1.5pts. See our comments on Lai Sun Development on10 Dec’25.FAEACO 12.814 Perp was down by 0.4pt. The NWDEVL complex wasunchanged to 0.1pt lower. In Chinese properties, VNKRLE 27-29 fell 1.0pt.FUTLAN 28 rose 1.4pts. See comments below on Seazen’s issuance of the10th trancheof CBICL-guaranteed bond. LNGFOR 27-32 gained 0.3-1.5pts.In JP space, NTT 35/MUFG 35-36s/SOBKCO 35/SMBCAC 35 were a touchwider. SOFTBK 8 1/4 10/29/65 lowered by 0.8pt. In SE Asia, GLPSP Perpswere up by 0.9-1.1pts. ACPM 4.85 Perp edged 1.0pt higher. VEDLN 28-33swere0.1-0.2pthigher.GARUDA31sweredownby4.6pts.RNW/INGPHL/RPVIN/INCLENwere unchanged to 0.1pt lower.Mediareported that ReNew Energy Global plans to raise USD800mn through a five-year loan.BBLTB/OCBCSP T2s widened 1-4bps. In LGFV space, wecontinued to see better-buying interests in onshore-AAA guaranteed andother quality, higher-yielding papers from RMs albeit overall slower pace inthe space. Last Trading Day’s Top Movers Marco News Recap宏观新闻回顾 Macro–S&P (+0.21%), Dow (+1.34%)and Nasdaq (-0.25%) were mixed on Thursday. The latest initial joblessclaims was +236k, higher than the market expectation of +220k.2yr UST yield was lower while 10/30 yr USTyield was higher on Thursday. 2/5/10/30 year yield was at 3.52%/3.72%/4.14%/4.79%. Desk Analyst Comments分析员市场观点 FTLNHD/FUTLAN:The 10th tranche of CBICL-guaranteed bond On 9 Dec’25, Seazen issued the10th tranche of CBILC-guaranteed bond.The issue size is RMB1.75bn andtenor is 5-year.The bond was priced at a coupon rate of 4%, and the proceeds will be used to refinance its4.3% 22SEAZENMTN003 of RMB2bn due on 12 Dec’25.Seazen has demonstrated anotably better accessto funding channels than most of its peers.Including the latest issuance, Seazen raised CBICL-guaranteedbonds totaled RMB3.65bn YTD for refinancing at a weighted average coupon of 3.46%.It also raisedUSD510mn from the USD bondmarket to refinance USD bonds totaled USD600mn maturing in Jul’ and Oct’25. Furthermore, Seazen could utilize the operating loans secured by its IPs. As of Jun’25, it has 18 malls remainunpledged, and this could betranslated into a headroom of additional cUSD1bn secured loans against its IPs(vs total o/s USD bonds of USD954mn).See our daily on18 Sep’25for more discussions on Seazen’s 1H25results. We believe that the maturity profile of Seazen is manageable in view of the financial flexibility offeredby its IPs and the gradual resumption ofaccess to various funding channels.Hence, we maintain buy onFUTLAN/FTLNHDs for their good carry. ChinaPolicy: Moderate stimulus in 2026 TheCentral Economic Work Conference (CEWC) signalled moderate stimulus in 2026 with fiscal policy tobecome more active and monetary policy to remain moderately loose. Key priorities include expandingconsumption, stopping fixed asset investment declines, stabilizing the property market, and preventing systemicrisks. We expect the PBOC will likely cut RRR by 50bps and LPRs by 20bps in 2026. Broad fiscal deficit mightreach 8.5% of GDP in 2026, compared to 8.4% in 2025. We estimate the GDP growth to continue to slow in4Q25 and 1Q26 before a possibly mild pick-up in 2H26 with the full-year growth down from 5% in 2025 to 4.8%in 2026. The deflationary pressure could moderately decline as commodity prices continue to rise and the supply-demand rebalance makes progress in a few sectors. We estimate the CPI and PPI growth rates to risefrom-0.1% and-2.6% in 2025 to 0.7% and-0.5% in 2026. China is likely to keep main economic targets unchanged for 2026.The GDP growth target is