Fixed Income Daily Market Update

CMBI Credit Commentary Fixed Income Daily Market Update固定收益部市场日报 Japanese and Yankee AT1s and insurance subs were 0.3pt firmer thismorning. FAEACO 12.814 rose 0.9pt. SOFTBK 31-36 were 0.5-0.7pt higher.GARUDA 31 leaked 0.7pt. YPCORP 29 was 0.5pt lower. Asian IG spacewas largely unchanged. LIHHK 4.8 06/18/26 moved 0.2pt higher after theannouncement that Lifestyle’s owner will repurchase all outstanding LIHHK4.8 06/18/26 at par. Glenn Ko, CFA高志和(852) 3657 6235glennko@cmbi.com.hk Cyrena Ng, CPA吳蒨瑩(852) 3900 0801cyrenang@cmbi.com.hk SHUGRP:FV of the new SHUGRP 29 to be high 4% vs IPT of 5.1%.SHUGRP 7.2 03/20/27 was unchanged this morning. See below. VEDLN:Vedanta Resources seeks to expand a USD350mn club loan itraised earlier this year, intending to raise at least an additional USD200mnunder the same terms. Vedanta Chair Anil Agarwal was named in case asplantexplosion death toll climbs to 24 people.VEDLN 28-33s wereunchanged this morning. Yujing Zhang张钰婧(852)3900 0830zhangyujing@cmbi.com.hk Trading desk comments交易台市场观点  Last Friday,in the new issue space, the new AGRBK Float 29 and MAYMKFloat29 both traded around RO levels of SOFR+35 and SOFR+57,respectively. The new EVRGTT 5.25 04/23/29 tightened 10bps from RO atT+160amid balance two-way flows among RM, PB and fast money accounts.In secondary IG space, Chinese TMT issues were largely stable. We sawslightly better selling on KUAISH 36s and better buying from RMs onZHOSHK 28. As for higher-yielding papers, FAEACO 12.814 Perp gained1.0pt. HYSANs were unchanged to 0.5pt higher. The NWDEVL/VDNWDLcomplex closed unchanged to 0.6pt higher. EHICAR 26 leaked 0.6pt, whileEHICAR 27 was 0.2pt higher. In Chinese properties, VNKRLE 27’ and 29’edged 0.1pt higher. LNGFOR 27-32 were 0.1pt lower to 0.1pt higher. In JPspace, IG bank papers and corporate credits such as TOHOKU/HOKKELtraded 1-2bps wider, while FRNs remained well bid. RESLIF 6.875 Perp was0.1pthigher,while NOMURA 7 Perp was 0.1pt lower.In KR space,HYUELE/HYNMTR tightened 1-3bps. In SE Asian space, PCORPM 7.35Perp led the space and rose 2.0pts. SMCGL Perps closed 0.1-0.2pt higher.On the other hand, VLLPM 29/PTTGC 7.125 Perp/PTTGC 6.5 Perp dropped0.3-1.4pts. In the Middle East, ARAMCOs were up to 1.1pts firmer. In LGFV space, the new CNH bond NEJAIN 4.9 04/23/31 climbed 0.8-0.9ptfrom RO at par on back of top-up demand from non-bank RMs. In contrast,the new CNH ZHHFGR 29 leaked 0.4pt from RO at part amid better selling.See our comments on the new issuelast Friday. In the rest of the space, wesaw cross-border RMs buying higher-yielding CNH issues. Last Trading Day’s Top Movers Marco News Recap宏观新闻回顾 Macro–S&P (+1.20%), Dow (+1.79%) and Nasdaq (+1.52%) were higherlast Friday.UST yield bull steepenedon Friday. 2/5/10/30 year yield was at 3.71%/3.84%/4.26%/4.88%. Desk Analyst Comments分析员市场观点 SHUGRP:FV for the new 3yr USD bond to be high 4%vs IPT of 5.1% We consider the FV of SHUGRP’s new 3-yr bond to be high 4%, taking cues from SHUGRP 7.2 03/20/27 whichis trading at YTM of c4.6%prior to the new deal announcement and adjusting for almost 2 year extension ofmaturity. We understand thatShuifa Group Co., Ltd. (Shuifa) will not fully utilize its NDRC quote for this issue.Shuifa could tap the market again later this year. Shuifa, wholly owned by Shandong SASAC, is the sole financing and operating platform in Shandong for waterconservancy and water-related construction, as well as the investment in and development, operation andmanagement of water-related projects and industries within and outside Shandong. Shuifa ranked among top10 of Shandong provincial state-owned enterprises. Inaddition, its bulk commodity trading centre for agriculturalproducts ranked first in Shandong in 2024.Shuifa is also a top player in the clean energy sector. In 2024, ithad the second largest installed capacity of photovoltaic power generation in Shandong, the 6th largestphotovoltaic power station EPC volume in China and the 9th largest market share of photovoltaic curtain wallin China, the largest market share of intelligent dimming film in China, the largest market share of resistiveconductive filmin China. It also had the largest installed capacity of wind power generation among SOEs inShandong Province, the largest installed agricultural and forestry biomass power generation capacity in theprovince. In FY24, its water, clean energy and agriculture segments accounted for 37%, 38% and 24% of itsgross profit, respectively. Shuifa has been enjoying strong business and financial support from the Shandong government.Since itsestablishment in 2009, Shuifa has received substantial capital injections from the Shandong government. As at31 Dec’24, the Shandong Provincial Department of Water Resources had made capital injections totalingcRMB52.1bn (Shuifa’ equity attributable to the parent company was RMB12.8bn as at 31 Dec’24). Additionally, the Shandong Provincial Department of Water Resources transferred the equity interests of 22e