20260106-招银国际-Fixed_Income_Daily_Market_Update_8页_908kb

CMBI Credit Commentary Summary

Core Content

This document provides a detailed market update and analysis from the Fixed Income Department of CMBI, focusing on the performance of various credit instruments, macroeconomic outlook, and investment recommendations for 2026. It also includes new issues and market color notes related to recent bond activity.

Market Performance Overview

• Fixed Income Market Movements:

  • BOCAVI 33/MUFG 32-37s/SUMIBK 29-47s tightened 1-2bps.
  • EXIMBK 36s were unchanged, while EXIMBK 56s tightened 7bps.
  • HYNMTR 29s tightened 1bp, and 31-33s widened 3bps.
  • UBS 6 5/8 Perp and UBS 7 Perp increased by 0.3-0.4pt.

• FRESHK:

  • The FV of the new FRESHK 29 is expected to be T+185bps.
  • FRESHK 27-28s widened 5-10bps.

• Top Performers:

  • TOPTB 3 1/2 10/17/49 (+1.6pt)
  • TOPTB 3 3/4 06/18/50 (+1.5pt)
  • VLLPM 9 3/8 07/29/29 (+1.4pt)
  • GRNLGR 6 3/4 09/26/29 (+1.2pt)
  • NWDEVL 10.131 Perp (+1.0pt)

• Top Underperformers:

  • VNKRLE 3 1/2 11/12/29 (-1.5pt)
  • FZSZJJ 7 12/27/27 (-1.3pt)
  • CHIYBK 5 3/4 04/07/32 (-0.8pt)
  • LMRTSP 7 1/2 02/09/26 (-0.5pt)
  • LNGFOR 3 3/8 04/13/27 (-0.5pt)

Trading Desk Comments

• Asian IG credits opened firm with better selling on front-end HYNMTR FRNs and buying on 5yr HYNMTR FRN.
• TW lifers (CATLIFs/FUBON/NSINTWs/SHIKON) tightened 1-3bps.
• Chinese AMC space showed two-way flows across fixed-rate and floating credits.
• CHIYBK 5.75 04/07/32 dropped 0.8pt.
• CASHLD 4 Perp increased by 0.7pt.
• PCCW's subsidiary CAS Holding issued a USD675mn PerpNC5.25.
• HYSAN 27-35 and MTRC Perps had balanced two-way flows and closed 0.1-0.3pt higher.
• LASUDE 26 dropped 0.3pt.
• Macau gaming bonds (MGMCHI, MPEL, SANLTD, STCITY, WYNMAC) showed mixed performance.
• SJM plans to issue USD bonds to fund a tender offer for SJMHOL 4.5 01/27/26.
• Chinese properties (GRNLGR, FUTLAN, FTLNHD, LNGFOR, VNKRLE) had varied movements.
• SE Asia credits (VLLPM, LMRTSP) had mixed performance.
• Yankee and Japanese AT1s and insurance hybrids were in demand in Greater China.
• AU T2s had mixed trades with spreads tightening 5bps to widening 6bps.
• LGFVs (FZSZJJ) saw a drop of 1.3pts.

Macro News Recap

• Equity Markets: S&P (+0.64%), Dow (+1.23%), Nasdaq (+0.69%) rose on Monday.
• US PMI: Dec'25 ISM Manufacturing PMI/Prices at 47.9/58.5, below expectations.
• UST Yields: Lower on Monday, with 2/5/10/30 year yields at 3.46%/3.71%/4.17%/4.85%.

Desk Analyst Comments

• FRESHK:

  • FEH is a Chinese leasing and financial services group.
  • In 1H25, FEH generated RMB17.3bn in revenue, with 64% from financial services.
  • Its NPL ratio was 1.05% as of Jun'25, with a provision coverage ratio of 227%.
  • FEH's leverage ratio was 6.1x, below the regulatory cap of 8.0x.
  • The FV of FRESHK 29 is expected to be T+185bps, lower than IPT at T+215bps.
  • Net proceeds will be used for working capital and general corporate purposes, possibly for intercompany loans.
  • CMBI recommends buying FRESHKs due to their diversified operations and better risk-return profile.

• Asia Credit Outlook 2026:

  • Tailwinds: Expected single 25bps rate cut, bull steepening of UST curve, weaker USD, and declining default rates.
  • Headwinds: Tighter credit spreads and lower total returns expected compared to 2025.
  • Themes: Focus on west-bound diversification, Middle East credits, European bank capital papers (AT1s, T2s), and spread compression opportunities.
  • Sector Preference: Domestic consumption plays due to supportive policies.
  • Alpha Opportunities: Lower-rated credits in improving sectors, such as Chinese properties and situational credits.

Investment Recommendations

• Middle East Diversification Plays:

  • ARAMCO 4 3/4 06/02/30 (YTM: 4.3%)
  • BSFR 6 3/8 Perp (YTM: 6.1%)
  • BSFR 5.761 09/03/35 (YTM: 5.7%)
  • EBIUH 4 1/4 Perp (YTM: 5.6%)
  • FABUH 6.32 04/04/34 (YTM: 4.6%)
  • FABUH 5.804 01/16/35 (YTM: 4.7%)

• Yield Pick-Up/Spread Compression Trades:

  • PTTGC 6 1/2 Perp (YTM: 6.2%)
  • PTTGC 7 1/8 Perp (YTM: 6.8%)
  • PCORPM 7.35 Perp (YTM: 6.1%)
  • RAKUTN 5 1/8 Perp (YTM: 6.1%)
  • Corporate perps (e.g., SMCGL, RAKUTN, BBNIJ, NOMURA) with high coupon step-up and good call records.

• Chinese Leasing Companies:

  • FRESHK 4 1/4 10/26/26 (YTM: 4.7%)
  • FRESHK 6 5/8 04/16/27 (YTM: 4.7%)
  • FRESHK 5 7/8 03/05/28 (YTM: 5.1%)
  • FRESHK 6 10/01/28 (YTM: 5.1%)

• Chinese AMCs with Government Support:

  • CCAMCL 4.4 Perp (YTM: 4.5%)
  • CFAMCI 3 7/8 11/13/29 (YTM: 4.3%)
  • CFAMCI 3 3/8 02/24/30 (YTM: 4.6%)
  • CFAMCI 3 5/8 09/30/30 (YTM: 4.7%)

• Short-Term Consumption Plays:

  • AACTEC 3 1/4 06/02/31 (YTM: 4.7%)
  • CNMDHL 4 3/4 07/10/30 (YTM: 4.9%)
  • HYUELE 1.5 01/19/26 (YTM: 3.9%)
  • HYUELE 2.375 01/19/31 (YTM: 4.4%)
  • ZHOSHK 5.98 01/30/28 (YTM: 5.4%)
  • EHICAR 7 09/21/26 (YTM: 17.6%)
  • EHICAR 12 09/26/27 (YTM: 10.5%)

• Other Sectors:

  • LGFVs: CPDEV 7.15 03/21/28 (YTM: 7.0%), CPDEV 6.8 04/07/29 (YTM: 7.0%)
  • Chinese Properties: CHJMAO 3.2 04/09/26 (YTM: 5.7%), CHJMAO 4 1/4 07/23/29 (YTM: 7.0%)
  • Non-SOE Survivors: CHJMAO 6 Perp (YTM: 4.5%)
  • T1/2 Cities: DALWAN 11 01/12/26 (YTM: 17.6%)
  • High-Quality IPs: DALWAN 11 02/13/28 (YTM: 13.1%), FTLNHD 4 1/2 05/02/26 (YTM: 86.3%), FTLNHD 11.88 09/30/27 (YTM: 17.3%), FUTLAN 11.88 06/26/28 (YTM: 16.1%), GRNCH 8.45 02/24/28 (YTM: 8.1%)

• Manageable Near-Term Maturities:

  • LNGFOR 3 3/8 04/13/27 (YTM: 9.6%), LNGFOR 4 1/2 01/16/28 (YTM: 10.2%), LNGFOR 3.95 09/16/29 (YTM: 10.8%), LNGFOR 3.85 01/13/32 (YTM: 10.1%)

• HK Corporate:

  • FAEACO 12.814 Perp (YTM: 18.0%)

• Situational Credits:

  • VDNWDL 9 Perp (YTM: 11.0%), WESCHI 9.9 12/04/28 (YTM: 10.5%)

• SE Asia Financial Institutions:

  • INCLEN 4 1/2 04/18/27 (YTM: 6.4%), INDYIJ 8 3/4 05/07/29 (YTM: 8.9%), MEDCIJ 8 5/8 05/19/30 (YTM: 7.0%), VEDLN 9.475 07/24/30 (YTM: 8.8%), VEDLN 11.25 12/03/31 (YTM: 9.5%)

New Issues

• Priced Issues:

  • BOC Aviation: 7yr, 4.375%, T+65
  • Export-Import Bank of India: 10yr, 5.0%, T+85; 30yr, 5.75%, T+95
  • Hyundai Capital America: 3yr, 4.25%, T+73; 3yr, SOFR+89; 5yr, 4.55%, T+85; 5yr, SOFR+107; 7yr, 4.8%, T+92
  • MUFG: 6NC5, 4.505%, T+80; 6NC5, SOFR+102; 11NC10, 5.057%, T+90
  • Saudi Arabia: 3yr, 4.125%, T+65; 5yr, 4.375%, T+75; 10yr, 4.875%, T+85; 30yr, 5.875%, T+110
  • Sumitomo Mitsui Financial Group: 3yr, 4.108%, T+60; 3yr, SOFR+76; 6NC5, 4.494%, T+80; 6NC5, SOFR+102; 11NC10, 5.046%, T+90; 21NC20, 5.57%, T+80

• Pipeline Issues:

  • Agricultural Bank of China New York Branch: 5yr, T+105
  • CAS Capital No.2 Limited: PerpNC5.25, 6.625%
  • Clifford Capital Asset Finance Pte: 3yr, T+62; 5yr, T+65
  • Far East Horizon: 3yr, T+215
  • Hanhui International: 3yr, 4.6%
  • Mitsubishi HC Finance America: 5yr, T+115
  • Resona Bank: 5yr, T+90
  • Swire Properties: 5yr, T+90
  • Export-Import Bank of Korea: 3yr, SOFR Equiv; 3yr, T+50; 5yr, T+53; 10yr, T+57

Disclaimer and Risk Information

• This report is for informational purposes only and does not constitute investment advice.
• There are risks involved in trading any securities.
• CMBIGM does not provide individually tailored investment advice.
• Past performance is not indicative of future results.
• The value and returns from investments are uncertain and may fluctuate.
• The report may be subject to change without notice.
• CMBIGM may have conflicts of interest and is not liable for any loss or damage from reliance on the information.
• This document is not for distribution to individuals outside the specified categories in the UK and US.

Contact Information

• Fixed Income Department:

  • Tel: 852 3657 6235 / 852 3900 0801
  • Email: fis@cmbi.com.hk

• Analysts:

  • Glenn Ko, CFA: (852) 3657 6235 | glennko@cmbi.com.hk
  • Cyrena Ng, CPA: (852) 3900 0801 | cyrenang@cmbi.com.hk
  • Yujing Zhang: (852) 3900 0830 | zhangyujing@cmbi.com.hk