Fixed Income Daily Market Update

CMBI Credit Commentary Fixed Income Daily Market Update固定收益部市场日报 In the new issuance space this morning, BBNIIJ 7.15 Perp opened 0.3pthigher than RO but has retraced to around RO at par. See our comments onthe FVyesterday. The new SOFTBK 36 traded 0.3pt lower from RO at par,while SOFTBK 29-31s were unchanged. The new CHALUM 3.9 04/22/29was unchanged from RO at T+22. Secondary Asian IG spacewas 2bpswider to 2bps tighter. Glenn Ko, CFA高志和(852) 3657 6235glennko@cmbi.com.hk Cyrena Ng, CPA吳蒨瑩(852) 3900 0801cyrenang@cmbi.com.hk Chinese properties:Contracted sales dropped 23.0% yoy in 1Q26. Seebelow. CATLIF/NSINTW:Cathay Life’s 1Q26 after-tax profit down 5% yoy toTWD17.4bn (cUSD552mn); Nan Shan Life’s 1Q26 after-tax profit dropped31% yoy to TWD8.5bn (cUSD268mn). CATLIF/NSINTW were unchangedthis morning. Yujing Zhang张钰婧(852)3900 0830zhangyujing@cmbi.com.hk Trading desk comments交易台市场观点  Yesterday,the new KORAIR 4.125 04/21/29 and NHNCOR 4.375 04/21/31tightened4-6bps from ROs at T+40 and T+60, respectively. As for thesecondary Asian IG space, spreads eased 1-2bps wider across China,Korea,Japanand TW lifers’space.We saw better selling in TMT namesMEITUA/KUAISH/WB/LENOVO, recent MIZUHO new issues, and selectedKorean credits LGENSO/HYNMTRHYUELE. In Asian higher-yielding space,FAEACO 12.814 Perp gained 0.9pt. EHCIAR 27 was 0.8pt firmer, whileEHICAR 26 lost 0.3pt. See our comments on EHICAR on14 Apr’26. InChinese properties, VNKRLE 27 was 0.2pt higher, while VNKRLE 29 leaked0.3pt. FUTLN 28/FTLNHD 26-29 were unchanged to 0.3pt higher. LNGFORclosed unchanged to 0.5pt higher. Moody’s downgradedLongfor by onenotch to B1 from Ba3 on high leverage and changed the outlook to stablefrom negative. In SE Asian space, BBNIIJ 4.3 Perp gained 0.8pt. BankNegara Indonesia priced its new USD PerpNC5.5 atYTC7.15%. See ourcomments on the FVyesterday. In the Middle East, SECO/BSFR andARAMCO 35s gained 0.1-0.3pt. In Japanese and Yankee AT1 space, thenew BNP 7.2 Perp edged 0.4pt firmerfrom RO at par. HSBC 6.75 Perp/HSBC7 Perp lost 0.2pt. RESLIF 6.875 Perp/NOMURA 7 Perp gained 0.1-0.3pt. In LGFV space, QDJZWD 27-28s were down 0.3-0.5pt. CCXI and ChinaLianhe Credit Rating both downgraded the credit rating of Qingdao ShangheHoldingDevelopment Group(Qingdao SHC),a subsidiary of QingdaoJiaozhou Bay, from AAA to AA+, and changed the outlook from stable tonegative,while simultaneously terminating the ratings.Qingdao SHCpreviously faced issues such as defaults and non-standard debt defaults. Wesaw better selling from non-Chinese accounts on QDJZWD, while HFssearched for a tactical entry point to buy in. The rest of the LGFV space waslargely stable amid two-way flows:better buying across higher-yieldingnames while better selling across lower-yielding USD issues. Last Trading Day’s Top Movers Marco News Recap宏观新闻回顾 Macro–S&P (+0.80%), Dow (-0.15%) and Nasdaq (+1.59%) were mixedon Wednesday. The latest US crudeoil inventories decreased by 913k barrels, compared to the market expectation of an increase of 154k-900kbarrels.5/10/30yearUSTyieldwashigheronWednesday.2/5/10/30yearyieldwasat3.76%/3.90%/4.29%/4.89%. Desk Analyst Comments分析员市场观点 Chinese properties:Contracted sales dropped 23.0% yoy in 1Q26 Contracted sales momentum showed modest recovery in Mar’26. The 30 developers under our radar reportedaggregate contracted sales of RMB152.5bn, down 15.9% yoy from RMB181.3bn in Mar’25.6 out of 30developers reported yoy increase in contracted sales in Mar’26, up from 2 in Feb’26. In 1Q26,cumulative contracted sales of the 30 developers fell 23.0% yoy to RMB307.5bn.CHJMAO(RMB22.4bn), GRNLGR (RMB13.9bn), CHIOLI (RMB51.5bn) were the better performers, recorded contractedsalesgrowth of 23%,15%,11%yoy,respectively.The bottom performers were REDSUN/HONGSL(RMB401mn), YLLGSP (RMB2.1bn) and GEMDAL (RMB3.3bn), with contracted sales down 74%, 60%, and60% yoy, respectively. The yoy decline in contracted sales moderated to 23.0% in 1Q26, from 29.0% in 2M26, partly reflectingsupportive measures rolled out in Mar’26, such as first-time homebuyers/young familiesin eligible cities arepermitted to use their housing provident fund balances toward home purchases, subject to local policyframeworks. These measures are in line with the Chinese authorities’ commitment stabilizing the propertymarketthrough city-specific measure,rather than a nationwide bailout.Local governments are beingencouraged to acquire unsold commercial housing inventory for conversion into affordable housing, The path to a sustained recovery remains weak given the soft homebuyers’ confidence, which in turn hingeson household income expectations and the home price outlook. CMBI Economic Research expects the PBOCto cut the LPR by 10bps by end-3Q26, which should provide some support to the subdued housing market.That said, geopolitical tensions in the Middle East could narrow the PBOC’s room to ease and potentially delaythe anticipated LPR cut, as higher energy prices may feed through int