Fixed Income Daily Market Update

CMBI Credit Commentary Fixed Income Daily Market Update固定收益部市场日报 •Asia IG spreads were unchanged this morning amid the JP holiday. We sawbuying interest in front-end Chinese AMC papers. The new BNP 7.125 Perpgained 0.2pt on PB top-up demand. The new CNH SDGOLD 29 rose0.1pt.GLPSP 4.6 Perp was 0.3pt higher. VNKRLE 29 up 0.7pt while VNKRLE 27down 0.5pt. Cyrena Ng, CPA吳蒨瑩(852) 3900 0801cyrenang@cmbi.com.hk Jerry Wang王世超(852) 3761 8919jerrywang@cmbi.com.hk •HONGQI:Early redemption of HONGQI 7.05 01/10/28 in full. Maintainneutral on HONGQIs, which were unchanged this morning. See below. •VEDLN:1QFY27 EBITDA surged 98%yoy to INR84.7bn, driven by volumegrowth and lower costs. Maintain buy on VEDLN 9.475 07/24/30 and VEDLN9 1/8 10/15/32. VEDLNs were unchanged this morning. See below. Trading desk comments交易台市场观点 Yesterday, Asia IG space was quiet with light flows amid the SG holiday andspreads closed unchanged. We saw selling in front-end CCAMCL and buyingin front-end ORIEAS, and two-way flows in HK T2s, includingprofit-taking inNANYAN 34 and buying in BNKEA 32/34. Korea space closed unchanged to2bps tighter in a risk-on tone, with accounts bidding higher-spread names likeDAESEC/LGENSO. We saw selling in high-spread FRN papers HSBC32/SUMIBK/MUFG though levels held unchanged. Inhigher-yielding space, European AT1s and JP AT1s and insurance subsclosed unchanged amid the SG holiday. The risk-on move last Friday nightwas offset by the latest Middle East headlines over the weekend. We sawlight and mixed two-way flows, driven by long-end positioning, and skewedto small better buying in the front end and to some extent 4-5yr to call issuesfrom AM and prop desks. China/HK names CKINF Perps rose 0.4-0.7pt.WESCHI 28-29 up 0.3-0.6pt.West China Cement clarified it expected torecord a decrease in its profit attributable to the owners to be RMB336.7-374.2mn in 1H26, representing a decrease of 45-50% from RMB748.3mn in1H25.In Thailand, PTTGC Perps were unchanged. PTTGCrecorded netprofit of THB14.5bn in 1H26, compared to a loss of THB6.4bn in 1H25. Seeour commentsyesterday.LGFVs remained supported, as persistent RMdemand for high-yielding CNH and USD papers absorbed supply fromtacticalholders. CMBI Fixed Incomefis@cmbi.com.hk ❖Last Trading Day’s Top Movers ❖Marco News Recap宏观新闻回顾 Macro–S&P (-0.06%), Dow (-0.11%) andNasdaq (-0.32%) were lower on Monday.UST yield was higher onMonday. 2/5/10/30 year yield was at 4.25%/4.41%/4.72%/5.25%. Desk Analyst Comments分析员市场观点 HONGQI: Early redemption of HONGQI 7.05 01/10/28 in full China Hongqiao (HONGQI) will fully redeem the outstanding USD330mnHONGQI 7.05 01/10/28 on 11 Sep’26at par, plus the Applicable Premium and accrued and unpaid interest, if any, to but excluding 11 Sep’26. TheApplicable Premium will be the greater of (i) 1.0% of the principal amount; and (ii) the excess of (A) the presentvalue, as of 11 Sep’26, of the principal amount due on 10 Jan’28 and all remaining scheduled interest paymentsthrough 10 Jan’28, excluding accrued and unpaid interest to 11 Sep’26, discounted at the Adjusted TreasuryRate plus 100bp, over (B) the principal amount outstanding on 11 Sep’26. We understand the redemption willbe funded by HONGQI’s internal resources. We view the early redemption as credit positive, reflecting HONGQI’s proactive liability management, improvedoperating cash generation and continued smooth access to diversified funding channels. The transaction retiresa relatively high-cost USD bond at 7.05%, albeit at the expense of a one-off call premium. Recalled thatHONGQI issued apositive profit alerton 10 Jul’26, guiding for c39% yoy growth in net profit to cRMB18.8bn in1H26, from RMB13.6bn in 1H25, mainly driven by higher selling pricesof aluminum alloy products.On thefunding front, a HONGQI subsidiary proposed on 31 Jul’26 to raise up to RMB12bn (cUSD1.8bn) through aprivate placement. HONGQI also raised RMB10.2bn through a zero-coupon, 363-day CB in Apr’26. In theonshore market, HONGQI raised RMB2.0bnYTD at a weighted-average coupon of 2.6%. We expectHONGQI’s credit profile to remain stable in the near term, assuming aluminum prices remain atelevated levels and management sustains its financial discipline. Within Chinese HY, we maintain neutral onHONGQIs.We view the current valuations as less compelling relative to its peers such as CWAHK 5.87510/22/30, which in our view offers a more attractive risk-return profile within the space. VEDLN: 1QFY27EBITDA surged 98% yoy to INR84.7bn, driven by volume growth and lower costs Within the VEDLN complex, we prefer VEDLN 9.475 07/24/30 and VEDLN 9 1/8 10/15/32, which,in our view,offer a more balanced risk-return profile given their lower cash prices and higher YTM.We acknowledgeVedanta Limited’s (VEDL) good access to diversified funding channels and Vedanta Resources’ (VRL)improved debt maturity profile followingits LMEs since Jan’24.Recent bonds issuance, tender offers forthe ’30-33s, full early redemption of the ’28s, ‘29s, ‘