Fixed Income Daily Market Update

CMBI Credit Commentary Fixed Income Daily Market Update固定收益部市场日报 Yankee and JP AT1s and insurance subs lost 1.0-1.5pts this morning. Wesaw better selling on JP FRNs and corporate names like NTT, as well as TWlifers NSINTW/SHIKON. Asian IG space overall widened 2-5bps. GLPSPPerps leaked 1.4-1.6pts. Glenn Ko, CFA高志和(852) 3657 6235glennko@cmbi.com.hk EHICAR:Exchange offer and concurrent exit consent for EHICAR 709/21/26. EHICARs were unchanged this morning. See below. Cyrena Ng, CPA吳蒨瑩(852) 3900 0801cyrenang@cmbi.com.hk HONGQI:Stronger cash position and improved debt structure; Maintainneutral on HONGQIs.HONGQI 28s were unchanged this morning. Seebelow. Yujing Zhang张钰婧(852)3900 0830zhangyujing@cmbi.com.hk Trading desk comments交易台市场观点  Last Friday,GLPSPs/GLPCHI 29 led the space and recovered 3.1-4.8pts.See our comments on19 Mar’26regarding GLP’s denial of market rumors.For the rest of the SE Asian space, ACPM Perps were unchanged to 0.2ptlower. SMCGL Perps/MEDCIJ 26-30s were 0.5pt lower to 0.1pt higher. InGreater China space, ZHOSHK 28 was 0.4pt weaker. FOUSNI 26-29 wereunchanged to 0.3pt lower. Media reported that Fosun raised USD500mnrefinancing loan despite loss warning for the FY25 results. In HK, theNWDEVL/VDNWDL complex were overall 0.2-1.4pts higher, except thatNWDEVL 5.25 Perp dropped 3.5pts. Media reported that NWD is consideringan USD4bn share offering to help meet debt payments and the Cheng familywill keep control of the company. LASUDE 26 edged 0.3pt higher, though LaiSun Development warned of a wider loss in 1H26, partly hurt by loss on saleof an asset and FV losses on investment properties. In Chinese properties,VNKRLE 27 edged 0.4pt higher, while VNKRLE 29 was 0.1pt lower. Vankeannounced that a subsidiary’s existing bank loan of RMB1.654bn has beenextended by one year, with guarantee arrangements remaining unchanged.FUTLAN 28/FTLNHD 26-29 were 0.2pt lower to0.2pt higher. LNGFOR 27-32 were down by 0.2-0.8pt. In JP space, RESLIF 6.875 Perp leaked 0.2pt.Yankee AT1s bounced back by up to 0.6pt at Asia open, driven by PB buyerstopping up the new HSBC 6.75/HSBC 7 Perps and prop desks reloadingselective risk papers,but eventually the space retraced 0.1-0.3pt fromintraday high. In the Middle East, ARAMCO 30-31s lost 0.5-0.6pt, andARAMCO 35-56s lost 1.0-1.3pts. BSFRs were unchanged to 0.2pt lower.LGFVs were a touch firmer as flows geared towards small better buyingthanks to persistent demand from RMs. Last Trading Day’s Top Movers Marco News Recap宏观新闻回顾 Macro–S&P (-1.51%), Dow (-0.96%) and Nasdaq (-2.01%) were lower on last Friday. UST yield was higher onlast Friday. 2/5/10/30 year yield was at 3.88%/4.01%/4.39%/4.96%. Desk Analyst Comments分析员市场观点 EHICAR:Exchange offer and concurrent exit consent for EHICAR 7 09/21/26 Subsequent to weeks of market talks and meetings with investors, EHi finally launched the exchange forEHICAR 7 09/21/26.As widely reported in media, the upfrontrepayment will be 10pts, plus exchange andconsent fee of 0.2pt. The remaining 90% will be exchanged into a 3.5NC2 bond due Oct’29 with a coupon rateof 10% and amortization totaling 29.5% of the new principal amount throughout the life of the new bond startingfrom Dec’26. The exchange will be subject to a minimum acceptance of 85% outstanding principal amount ofUSD266.03mn.The new 3.5NC bond will have customary high yield covenant package in line with existing2026 and 2027 bonds (such as the incurrence test of FCCR of 2.5x).The approval threshold for the exitconsent, aiming at eliminating non-monetary restrictive covenants and events of default, is 50% of the principalamount. Holders tender the bond will be deemed to have provide their exit consent. The expiration date of theexchange offer and exit consent will be on 30 Mar’26. See Table 2 for details of the exchange. The exchange, if successfully goes ahead, will effectively extend the maturity of EHICAR 7 09/21/26 for around3 years. Hence, the new maturity will be behind that of EHICAR 12 09/26/27, EHi’s only other outstanding USDbond. As per our discussions with EHi, EHICAR 12 09/26/27 is excluded from this round of liability managementexercise (LME) because EHi is subject to the constraint of available NDRC quota of USD400mn which willexpire in mid Apr’26.Hence, we believe that EHi may come to the market for a consensual LME for EHICAR12 09/26/27 next year. Assuming discount rates of 12-18%, we estimate that NPV for EHICAR 7 09/21/26 to mid-80 to md-90, basedon the current exchange offer.Indeed, we maintain our view that the current valuations of EHICARs havepriced in too much downside for a non-distressed credit even though EHi’s deleveraging has been slower thanour expectation in the course of active car acquisitions. We maintain buy on EHICARs. HONGQI:Stronger cash position and improved debt structure; Maintain neutral on HONGQIs China Hongqiao (HONGQI) reported a 4.0% yoy increase in FY25 revenue to RMB162.4bn, driven by higherselling prices of aluminu