Fixed Income Daily Market Update

CMBI Credit Commentary Fixed Income Daily Market Update固定收益部市场日报 This morning, 2-5yr IG bonds tightened up to 5bps amid better buying. Onthe other hand, we saw better selling in 10yr JP/KR and Chinese IGissues,notably in LGENSO/KUAISH/MEITUA. SOFTBK 31 leaked 0.5pt. EHICAR26 gained 1.1pts. Glenn Ko, CFA高志和(852) 3657 6235glennko@cmbi.com.hk CWAHK:Initiate buy on CWAHK 5.87510/22/30 which was 0.1pt lower thismorning. See below. Cyrena Ng, CPA吳蒨瑩(852) 3900 0801cyrenang@cmbi.com.hk VNKRLE:Vanke will auction off its stake in pig farming and poultrybusinesses for at least USD479mn and place 99.41% stake in HuanshanGroup up for sale. Vanke 1Q26 revenue fell 23.9% yoy to RMB28.93bn(cUSD4.23bn). VNKRLE 27’ and 29’edged 0.1-0.2pt higher this 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 EBIUH 6.25 Perp edged 0.5pt higher from RO at par. Theissue is the first USD AT1 issued by a Middle Eastern bank since start of thewar in Iran. We initiate buy on the new EBIUH 6.25 Perp and maintain buyon EBIUH 4.25 Perp. See our commentsyesterday. The rest of EBIUHs wereunchanged to 0.1pt lower. SECO/BSFR/FABUH were unchanged to 0.3ptlower. ARAMCOs were up to 1.0pt lower. In KR space, the new SKONKR4.375 05/07/29 widened 4bps from RO at T+57 amid profit-taking flows,especially earlier in the day. Meanwhile, the recent new issues CITNAT 29-31s and HIGHWY 31 widened 1bp but remained well bid. As for the rest ofthe KR space, we saw PBs buying HYUELE while AMs selling LGENSO;however, spreads for both names remain unchanged. In JP space, we sawtwo-way flows in NIPLIF and MIZUHO 31s and profit-taking activities acrossbank FRNs, specifically in MUFG and SUMIBK, but the spreads remainedlargely stable. Taiwanese lifers remained steady, amid stronger buyinginterests in NSINTW. EVRGTT tightened 3bps on the back of PB buying. InChinese IG space, we saw light selling on front-end FRESHK and GRWALL,but the space was largely range-bound in spreads. ZHOSHK 28 was 0.1pthigher. CWAHK 30 dropped 0.9pt after China Water Affairs priced the tappedtranche at 7.1%. See our comments below. In HK, NWDEVL Perps andFAEACO 12.814 Perp were up to 0.6pt higher. In Chinese properties,VNKRLE 27’ and 29’ lost 0.1-0.3pt. Vanke’s 1Q26 revenue fell 23.9% yoy toRMB28.93bn (cUSD4.23bn). FUTLAN 28/FTLNHD 26-29/LNGFOR 27-32were 0.1pt lower to 0.1pt higher. Seazen 1Q26 revenue was down 24.9% yoyto RMB7.3bn. In SE Asian space, MEDCIJ 26-30 and the ReNew Energycomplex were unchanged to 0.1pt lower. Last Trading Day’s Top Movers Marco News Recap宏观新闻回顾 Macro–S&P (-0.49%), Dow (-0.05%) and Nasdaq (-0.90%) were lower on Tuesday. US Apr’26 CB ConsumerConfidence was 92.8, higher than the market expectation of 89.0.UST yield bear flattened on Tuesday. 2/5/10/30year yield was at 3.84%/3.97%/4.36%/4.94%. Desk Analyst Comments分析员市场观点 CWAHK: Initiate buy on CWAHK 5.875 10/22/30 We initiate buy recommendation on CWAHK 5.87510/22/30 (Ba1/BB+) in view of its utility-type business profileand diversifying funding access.At 95.6, CWAHK 5.87510/22/30 is trading at YTM of 7.0%.We believe thatCWAHK 5.87510/22/30 offers more attractive risk-return profile than those of other BB-rated Chinese HYs suchas BTSFDF, FOSUNIs and HONGQIs.Subsequent to the recent tap for another USD150mn, the issue sizeofCWAHK 5.87510/22/30 increased to USD300mn which should make the bond index-eligible.This shouldsupport a stronger technical of the bonds.Recalled that the tap price of CWAHK 5.875 10/22/30 is 95.384, i.e.YTM of 7.1% (vs IPG of 7.3%) and the use of proceeds is to fund the concurrent tender offer for CWAHK 4.8505/18/26 at par.The maximum acceptance amount is USD150mn, same as the re-tap size, and the tenderoffer will be expired on 6 May’26.See Table 2. CWAHK is one of the largest water supply companies in China with 0.8bn tons of water sold to 8.2mn customeraccounts in 1HFY26 (ended Sep’25).It focuses on water supply (mainly city water supply) and sewagetreatment which accounted for c68% and c16% of its revenue in 1HFY26, respectively.CWAHK generatesstable cash flow from exclusive concession rights to operate its water supply business in 58 districts, counties,and county-level cities including Beijing, Chongqing, Guangdong, Heilongjiang, Jiangsu, Tianjin, etc. CWAHKserves residential, industrial, and other end users, with potential coverage of over 30mn people across China.The company is listed in Hong Kong (855 HK). Chairman and founder Mr. Duan Chuan Liang owns27.4%; ORIX Corp and affiliates hold 27.3%; and Great Wall Life Insurance holds 6.0%. CWAHK is a holdingcompany with no material operations, conducting the majority of its business through PRC subsidiaries.CWAHK 30 is guaranteed by certain non-PRC-incorporated subsidiary guarantors that do nothave materialoperations. In 1HFY26, CWAHK’s revenue declined 12.9% yoy to HKD5.2bn, reflecting slower installation, maintenanceand construction works. Gross profit fell 20.1%