Fixed Income Daily Market Update

CMBI Credit Commentary Fixed Income Daily Market Update固定收益部市场日报 This morning, flows were light across all spaces as Japan and mainlandChina are out for holiday. FAEACO 12.814 Perp gained 0.9pt. SOFTBK 31-65s were 0.3-0.5pt higher, while SOFTBK 28 lost 0.3pt. GLPSP 28 was 0.2ptlower. Glenn Ko, CFA高志和(852) 3657 6235glennko@cmbi.com.hk GENTMK:Prefer SMCGL/PCORPM Perps over GENTMK Perps.SMCGL/GENTMK Perps were unchanged to 0.1pt higher this morning, whilePCORPMPerps were unchanged. See below. Cyrena Ng, CPA吳蒨瑩(852) 3900 0801cyrenang@cmbi.com.hk MPEL/STCITY:1Q26 operating revenue grew 11.4% yoy to USD1.4bn onimproved mass market performance. MPELs/STCITYs were unchanged thismorning. See below. Yujing Zhang张钰婧(852)3900 0830zhangyujing@cmbi.com.hk Trading desk comments交易台市场观点 Last Thursday,WESCHI 28-29 lost 0.6-1.4pts. EHICAR 26 gained 1.1pts,while EHICAR 27-29 were unchanged to 0.3pt lower. We saw better-buyingin 10yr benchmark names MEITUA/KUAISH/LINREI/Taiwan lifers, whichtradedupto5bpstighter.TheMacaugamingcomplexSJMHOL/MGMCHI/MPEL/SANLTD/STCITY/WYNMAC were unchanged to0.3pt lower.See comments below on Macau gaming 4M26 GGR andMPEL/STCITY 1Q26 results. In HK, the NWDEVL/VDNWDL complex wereup to 0.8pt lower. FAEACO 12.814 Perp lost 0.1pt. In Chinese properties,VNKRLE 27 was 0.1pt higher, while VNKRLE 29 lost 0.3pt. Vanke 1Q26revenue fell 23.9% yoy to RMB28.93bn (cUSD4.23bn). FUTLAN 28/FTLNHD26-29/LNGFOR 27-32 were 0.1pt lower to 0.2pt higher. In SE Asian space,GENTMKs were unchanged to 0.1pt lower. See comments below. VEDLN28-33s were unchanged to 0.2pt lower. IHFLIN 27-30/MEDCIJ 26-30 closedunchanged to 0.1pt lower. TOPTB/PTTGC Perps traded 0.1-0.3pt lower. InKR, recent new issues SKONKR and CITNAT were 2bps wider to 2bps tighter.LGENSO spreads marked 2–4bps wider across the curve amid mixed two-way flows. In the FRN space, we sawselling pressure in 5yr JP/EU banknames MUFG/SUMIBK/HSBC/STANLN, resulting in spreads widening by 1–2bps. RESLIF 6.875 Perp/NOMURA 7 Perp leaked 0.1pt. Last Trading Day’s Top Movers Marco News Recap宏观新闻回顾 Macro–S&P (+0.29%),Dow(-0.31%) and Nasdaq (+0.89%) were mixed on last Friday.S&P GlobalManufacturing PMI Apr’26 was 54.5, higher than the market expectation of 54.0. ISM Manufacturing PMI Apr’26was 52.7, lower than the market expectation of 53.1. ISM Manufacturing Prices Apr’26 was 84.6, higher than themarket expectation of 80.0. 10/30 yearUST yield was lower on last Friday. 2/5/10/30 year yield was at3.88%/4.02%/4.39%/4.97%. Desk Analyst Comments分析员市场观点 GENTMK:Prefer SMCGL/PCORPM Perps over GENTMK Perps Subsequent to the issuances of GENTMK 7 5/8 PERP and GENTMK 8.3 PERP, Genting announced to acceptthe tender offer of GENTMK 4.254 01/24/27 of USD882.5mn vs a maximum purchase amount of USD1.25bn,equivalent to the combined issue size of the 2 perps. The outstanding amount of GENTMK 4.254 01/24/27 willtherefore reduce to USD617.5mn. We expect that Genting will continue to explore opportunities to early redeemGENTMK 4.254 01/24/27 with the remaining proceeds from the new perp issuances. While we consider GENTMK 7 5/8 PERP and GENTMK 8.3 PERP good carry plays, in Asia corporate perpspace, we prefer SMCGL Perps and PCORPM Perp given our preference for perps with high coupon step-upand issuers with good track records of calling their perps on the first call dates. We also prefer corporate perpswith shortertenor in view of the expected UST rate volatility. MPEL/STCITY: 1Q26 operating revenue grew 11.4% yoy to USD1.4bn on improved mass marketperformance Table 2: Macau monthly GGR Despite our expectation of more supply in view of the scheduled maturities and undemanding funding costs,we still like Macau gaming bonds aslower-beta and good carry plays with improving credit stories. Our toppicks in the sector areMPELs,STCITYs, andSJMHOL 31, given the growing adj. EBITDA of Melco Resortsand Studio City, as well as the more appealing risk-return profiles of these bonds.We also considerWYNMAC’27 and ‘29yield pick-up plays, trading at premium of c50-60bps over bonds of its US parent.Weare neutral on MGMCHIs, SANLTDs, and SJMHOL 28 on valuation. In Apr’26, Macau’s gross gaming revenue (GGR) increased 5.5% yoy to MOP19.9bn, reflects the continuousrecovery of tourist visitation after COVID. Cumulatively, the GGR in 4M26 increased 12.1% yoy to MOP85.8bn,represented 86.0% of pre-COVID level in 2019. We consider Macau government’s GGR forecast of MOP236bnin 2026 to be conservative taking cues from the growth momentum in 2025 and YTD. In 2025, GGR in Macauincreased 9.1% to MOP247.4bn, equivalent to 84.6% of pre-COVID level in 2019.The actual 2025 GGRexceeded Macau government’s revised forecast of MOP228bn, thanksto the 15% increase in tourist arrival tothe record high of 40.1mn. We expect the Macau government to revise the 2026 GGR forecast upward. Separately, in 1Q26, Melco Resorts (MPEL) reported a 11.4% yoy increase in operating revenue to USD1.4bn,with 11.7% yoy increase in a