Fixed Income Daily Market Update

CMBI Credit Commentary Fixed Income Daily Market Update固定收益部市场日报 This morning, the new KOEWPW 32 was unchanged from RO at T+58.Thenew KOREAT 30s tightened 2bps from RO at T+55. TW lifers tightened 1-2bps. ZHOSHK 28 lost 1.5pts. ACENPM 4 Perp was down 0.4pt. GLPSP 28gained another 0.5pt. EHICAR 26/LASUDE 26 were 0.3-0.4pt higher. Cyrena Ng, CPA吳蒨瑩(852) 3900 0801cyrenang@cmbi.com.hk Jerry Wang王世超(852) 3761 8919jerrywang@cmbi.com.hk FUBHKL:FV of the new FUBHKL 36 to be T+130bps vs. IPT at T+160bps.See below. KUAISH/TENCNT: Tencent reduced its stake in Kuaishou to c9.4% fromc15.7% and ceased to be a substantial shareholder. KUAISH/TENCNT wereunchanged this morning. Yujing Zhang张钰婧(852)3900 0830zhangyujing@cmbi.com.hk Trading desk comments交易台市场观点 Yesterday,Asian IG space overall traded 2-4bps tighter. We saw flows wereprimarily concentrated inChinese TMT BABA 35/TENCNT 36-46/MEITUA31-35/KUAISH 36alongside recent JP new issues MIZUHO 30-47s/SUMIBK32-47s/NOMURA 29-36s.TW lifers closed 1-2bps tighter,with modestbuying interests in FUBON. Fubon Bank (Hong Kong) announced IPT for thenew10NC5 T2 USD issue.See comments below.In KR space,DAESEC/HANFGI/NHSECS were 4-6bps tighter amid better buying. KRcorporate POINTL/PKX/HYUELE/NHNCOR fixed-rate papers tightened 2-4bps. KOROIL/HYNCRD FRNs underperformed and closedunchanged amidAM selling. In higher-yielding space, FAEACO 12.814 Perp led the space and rose 2.8pts.FarEast Consortium(FEC)will sell a 100%stake in a studentaccommodationproperty in Hong Kong to JD.com for HKD750mn(cUSD95.6mn) to repay debts. FEC will continue to manage and operate theproperty for a term of three years and to receive guaranteed income eachyear. Separately, FEC will reassess options for a LME for FAEACO 12.814Perp as per media report.On the other hand, LASUDE 26 lost 0.7pt.In SEAsia, VEDLN 31-33s dropped 3.1-5.6pts, while the rest of VEDLNs were0.3ptlower to 0.2pt higher.There were market chatters that VedantaResources may issue new bond to early redeem VEDLN 31s to lower thefunding cost, given its coupon is the highest within the curve. GLPSP28/GLPCHI 29 gained 0.7-0.8pt, while GLPSP Perps were down 0.1-0.3pt.GENTMKs edged 0.1-0.4pt higher. In AT1 space, STANLN 7 Perp was up by0.3pt, while INTNED 6.5 Perp lost 0.8pt. CMBI Fixed Incomefis@cmbi.com.hk Last Trading Day’s Top Movers Marco News Recap宏观新闻回顾 Macro–S&P (+0.72%), Dow (+0.29%) and Nasdaq (+1.12%) were higher on Monday. US Jun’26 S&P GlobalServices PMI was 51.2, lower than the marketexpectation of 51.3. US Jun’26 ISM Non-Manufacturing PMI was54.0, lower than the market expectation of 54.2. US Jun’26 ISM Non-Manufacturing Prices was 67.7, higher thanthe market expectation of 67.5. 2/5/10 yearUST yield were lower on Monday. 2/5/10/30year yield was at4.13%/4.21%/4.48%/4.99%. Desk Analyst Comments分析员市场观点 FUBHKL:FV ofthe new FUBHKL 36 to be T+130bps vs. IPT at T+160bps Fubon Bank (Hong Kong) Limited (-/A-/-, Fubon HK) proposes to issue 10NC5 Tier 2 Reg S USD bond (-/BBB/-).We view the FV of the new FUBHKL 36 to be T+130bps vs. IPT at T+160bps,taking cues of the valuations ofits peers such as NANYAN, BNKEA, and DAHSIN, as well as its affiliates FUBON 35, adjusted for longer intenor and new issue premium. The issue size is capped at USD300mn. At the time of writing, the order bookexceeded USD1.6bn. The new bond iscallable on the reset date of 14 Jul’31, subject to prior written consent from the HKMA. It isalso subject to non-viability loss absorption, triggered upon the earlier of the HKMA notifying the bank in writingthat: (i) it is of the view that a full or partial reduction or conversion of principal, together with the cancellation ofany accrued but unpaid interest, is necessary, without which the bank would become non-viable; and (ii) adetermination has been made by the relevant authorities that a public sector capital injection or equivalentsupport is required, without which the bank would become non-viable. Moreover, the bond may be written off,cancelled, converted, modified, or otherwise have its form changed through the exercise of Hong KongResolutionAuthority powers, without prior notice. Fubon HK is wholly owned by Fubon Financial Holding, the second-largest financial holding company in Taiwanby market capitalization as of Jun’26.Fubon HK is regulated by the HKMA with oversight from Taiwanregulators. Its businesses spanning across consumer and wholesale banking, wealth management, financialmarkets, and investment services, with 15 branches in Hong Kong as of Dec’25. Fubon HK recorded improved profitability in FY25. Net interest income increased 12% yoy to cHKD2.9bn,supported by 17% yoy growth in interest-earning assets. Net interest margin compressed to 1.77% in FY25from 1.84% in FY24, as asset yield compression from rate cuts outpaced funding cost repricing. Cost-to-incomeratio declined to 42.1% from 43.5% on improved operating efficiency. Impairment losses fell 50.9% yoy toHKD279mn, reflecting a strategic sh