Fixed Income Daily Market Update

CMBI Credit Commentary Fixed Income Daily Market Update固定收益部市场日报 Asian fixed-rate IG credits were 1-4bps tighter this morning.VLLPM 29 wasdown by 0.7pt. ACPM 4.85 Perp was 0.4pt lower. PMBROV 30 recovered0.5pt. FAEACO 12.814 Perp was 0.4pt higher. Glenn Ko, CFA高志和(852) 3657 6235glennko@cmbi.com.hk SUNHKC:FV of the new SUNHKC 29 to be mid-6% vs IPT at 6.75%. Seebelow. Cyrena Ng, CPA吳蒨瑩(852) 3900 0801cyrenang@cmbi.com.hk YXREIT:Media reported Yuexiu REIT is gauging investor interest inUSD/CNH bond to refinance USD400mn YXREIT 2.65 02/02/26. YXREIT2.65 02/02/26 was unchanged this morning. Trading desk comments交易台市场观点 Yujing Zhang张钰婧(852)3900 0830zhangyujing@cmbi.com.hk Yesterday,the new POHANG 31-36s/SKBTAM 29 tightened 3-5bps fromROs amid buying from Chinese onshore accounts. The new CSILTD Float31 widened 1bp from RO at SOFR+60. There were AM selling flows on theexisting CSILTD curve. Chinese IG credits traded firmly overall and tightened1-3bps across the board. We saw solid buying interests in beta names,particularly in FRESHK/ZHOSHK. EHICAR 26-27 were 0.5pt lower. TheNWDEVL/VDNWDL complex rose 0.4-2.3pts. SUNHKC 5 09/07/26 was 0.1pthigher. Sun Hung Kai announced 6.75% IPT for the new 3yr USD bond, andcommenced tender offer for SUNHKC 26 of USD350.057mn at par. Seecomments below. WESCHI 26-28/DALWAN 28 were unchanged to 0.2pthigher. LASUDE 26 increased by 0.5pt. See our commentsyesterday. InChineseproperties,VNKRLE 27-29 were down by 0.2pt.Vanke hasproposedrevised terms to extend its onshore bond 22VankeMTN004,including collateral pledges and an extended grace period to 29 Apr’25 from28 Jan’25. FUTLAN 28/FTLNHD 26-27 were 0.2pt lower to 0.2pt higher. InJP space, SUMIBK/MUFG 5yr FRNs tightened 1-3bps on back of strongdemand from Chinese accounts. TACHEM 35 was 1bp tighter. In SE Asiaspace, there were mixed two-way flows on BBLTB senior curve, while BBLTBsubs tightened 1-2bps. UOBSP 31s/KBANK 31 were also 1-2bps tighter.GARUDA 31s surged2.0pts. TOPTB 6.1 Perp was 0.1pt higher. IHFLIN 26-30s/INDYIJ 29s/VEDLN 28-33s were up by 0.1-0.3pt. In the Middle East, wesaw block-size trading on FABUH 31s, but the notes closed unchanged. InAU space, CRNAU 29/PMBROV 30 were 0.5pt lower. Last Trading Day’s Top Movers Marco News Recap宏观新闻回顾 Macro–S&P (-0.19%), Dow (-0.80%) and Nasdaq (-0.10%) wereloweron Wednesday. US approved NvidiaH200 chip exports toChina with some conditions. UST yield was lower on Wednesday. 2/5/10/30 year yield wasat 3.53%/3.75%/4.18%/4.83%. Desk Analyst Comments分析员市场观点 SUNHKC:FV of the new SUNHKC 29 to be mid-6% vs IPT at 6.75% Sun Hung Kai & Co. (0086.HK, SHK) proposes to issue 3yr USD senior unsecured bond (unrated), The issuerwill be a wholly-owned SPV and the bond will be guaranteed by SHK.We view the FV of the new SUNHKC 29to be mid-6% vs IPT at 6.75%, in view of the valuation of its peers and adjusted for tenor differential. See Table1. The proceeds from the new issue will be used to fund the concurrent tender offer for SUNHKC 5 09/07/26 andfor general working capital. The tender price is at par and SHK will accept any and all of the amount tendered.SHK may prioritize the allocation of the new bond to holders who tender the bond. The settlement of the tenderoffer is subject to the successful settlement of the issue of the new bond. SHK is 74.6%-owned by Allied Group Limited (0373.HK) and ultimately owned by Lee and Lee Trust. SHK isan alternative investment platform across (i) credit (including consumer finance via UA Finance and mortgagelending via Sun Hung Kai Credit), (ii) investment management and (iii) fund management businesses. In 1H25,SHK generated total income of HKD2.8bn, represented 43.5% yoy increase from 1H24, with credit and fundmanagement businesses contributed c62%of the total income and investment management accounted formost of the remainder. c91% of income was generated in Hong Kong and the rest was from the mainland China. In 1H25, pre-tax profit increased to HKD1.1bn from HKD307mn in 1H24. ROE rose to 8.2%in 1H25 from 0.7%in 1H24. These improvement were driven by investment management segment, which turned to pre-tax profitof HKD786mn from pre-tax loss of HKD148mn in 1H24, benefited from improved sentiment towards China-related assets.Moreover, the leverage metrics improved on higher profitability. The net gearing ratio down to29.6% as of Jun’25 from 31.2% as of Dec’24, while interest coverage increased to 4.1x from 1.9x. As of Jun’25,SHK had cash of HKD4.5bn and total debts of HKD11.0bn, of which c52% is due within one year. Offshore Asia New Issues (Priced) Offshore Asia New Issues (Pipeline) News and market color Regardingonshore primary issuances, there were 112 credit bonds issued yesterday with an amount ofRMB107bn. As for month-to-date, 645 credit bonds were issued with a total amount of RMB517bn raised,representing a 20.3% yoy decrease [BIOLIN]Biocon INR41.5bn QIPattracted 4x demand, primarily from local mutual funds [CASHLD]CAS dec