20230329-招银国际-Fixed_Income_Daily_Market_Update_7页_864kb

CMBI Credit Commentary Summary

Core Content Overview

This document provides a comprehensive summary of the fixed income market updates and key credit events in the Asia region, with a focus on China and other Asian markets. It includes market movements, new issue activity, restructuring announcements, and macroeconomic developments. The summary also features detailed analysis on specific issuers, such as ROADKG and SUNAC, and highlights the implications of these events on their credit profiles and market valuations.

Key Market Movements

• Asia IG Space: New issues AIA 4.95'33 and HYNMTRs tightened by 10bps and 2-5bps respectively.
• China TMT: Narrowed 5-10bps due to the reorganization of BABAs.
• China AT1: Slightly up by 0.25pt, while LGFV remained stable.
• Top Performers:
  • LNGFOR 4 1/2 01/16/28: +3.9pts
  • LNGFOR 3 3/8 04/13/27: +3.8pts
  • LNGFOR 3.95 09/16/29: +2.9pts
  • LNGFOR 3.85 01/13/32: +2.4pts
  • SINOCE 4 3/4 01/14/30: +2.3pts
• Top Underperformers:
  • GRNLGR 6 3/4 06/25/24: -6.0pts
  • ROADKG 6 09/04/25: -4.5pts
  • CENCHI 7.9 11/07/23: -3.9pts
  • ROADKG 5 1/8 07/26/26: -3.3pts
  • GRNLGR 6 3/4 03/03/26: -3.0pts

Key Credit Events

ROADKG

• FY22 Results: Revenue down 30.5% to HKD17.2bn, net profit down 76.9% to HKD458.6mn.
• Market Reaction: After a profit warning, ROADKGs dropped 15pts. However, the 7.75 PERP is currently trading at 67.4 with a YTC of 35.3%.
• Debt Structure:
  • Full redemption of USD343mn ROADKG 7.875 02/01/23 in Feb'23.
  • Current cash to short-term debt ratio is 0.8x, down from 1.44x in FY21.
• Liquidity Outlook: Expected to improve in FY23 with recovery in toll road traffic and property markets.

SUNAC

• Debt Restructuring: Signed a Restructuring Support Agreement (RSA) with AHG, representing over 30% of existing debt holders.
• Restructuring Options:
  • New Notes: Maturities extended to 2-9 years, with coupon rates reduced to 5-6.5%.
  • Convertible Bonds (CB): USD1bn, 9-year maturity, 1% annual interest (first two years PIK), conversion price HKD20.
  • Mandatory Convertible Bonds (MCB): Voluntary election, USD1.75bn cap, 5-year maturity, interest nil, conversion price HKD10 or HKD4.58.
  • Sunac Services Shares: Voluntary election, capped at 14.7% of total issued shares, exchange price 2.5x VWAP.
• Cash Sweep Clause: Allows redemption of New Notes and MCB from asset sale proceeds.
• Restructuring Timeline:
  • Consent fee deadline: 20 Apr'23
  • Restructuring effective date: On or before 30 Sep'23
  • Longstop date: 31 Dec'23

New Issue Activity

Priced New Issues:

• AIA Group: 600mn USD, 10-year, 4.95% coupon, yield T+145
• Bank Mandiri Persero Tbk PT: 300mn USD, 3-year, 5.5% coupon, yield T+183
• Hyundai Capital America: 1200/800/500mn USD for 3/5/7-year tranches, coupons 5.5%/5.6%/5.8%, yields T+175/T+200/T+225

Pipeline:

• No offshore Asia new issues pipeline reported for the day.

Macro News Recap

• U.S. Markets: S&P, Dow, and Nasdaq all declined due to recession concerns.
• U.S. Consumer Confidence: Rose to 104.2, higher than expected.
• China TMT Sector: Narrowed 5-10bps due to BABAs reorganization.
• Syngenta IPO Cancellation: Led to a 5bps widening in HAOHUA curve.
• Property Sector: Quality names rebounded 1-2pts, with SINOCE 25-29s bouncing back to mid-40s.
• LNGFORs: Jumped 2.4-3.9pts.
• COGARDs: Closed 0.5-1.25pts higher.
• Road King: Traded down 2-4.5pts.
• Greentown: Repaid cUSD700mn due 2023 debts as scheduled.
• Indika Energy: Revenue up 41% to USD4.3bn, profit up 7x to USD511mn.
• Logan: Expected to release detailed restructuring plan in two weeks.
• Medco Energi: Fully redeems IDR217.5bn (cUSD14.5mn) 9.15% notes due 2023.

Key Analyst Comments

• Asia IG sentiment improved due to the acquisition of SVB by First Citizens Bank.
• Investor activity was cautious, with flows skewed to the front end of the curve due to cash management needs.
• CTIH 6.4 Perp edged higher by 0.125pt to 102.
• SOE perps were largely stable or slightly firmer.
• AT1s remained stable, with benchmark AT1s (BCHINA 3.6 Perp, ICBCAS 3.58 Perp) traded actively in two-ways.

Important Disclosures

• CMBIGM does not provide individually tailored investment advice.
• The report is for informational purposes only and should not be construed as an offer or solicitation to buy or sell any security.
• The information is based on publicly available data and may not be accurate or complete.
• CMBIGM is not a registered broker-dealer in the U.S. and may have conflicts of interest.
• The report is distributed in Singapore by CMBISG, an exempt financial adviser, and is subject to legal responsibilities only to the extent required by law.

Contact Information

• Glenn Ko, CFA: (852) 3657 6235 | glennko@cmbi.com.hk

• Cyrena Ng, CPA: (852) 3900 0801 | cyrenang@cmbi.com.hk

• Jerry Wang: (852) 3761 8919 | jerrywang@cmbi.com.hk

• CMB International Global Markets Limited

• Fixed Income Department

• Tel: 852 3761 8867 / 852 3657 6291

• Email: fis@cmbi.com.hk

Author Certification

• The author certifies that the views expressed accurately reflect personal opinions.
• No compensation is directly or indirectly related to the specific views in the report.
• The author has not traded in the stocks covered in the report within 30 days prior to publication.
• The author will not trade in the stocks covered in the report for 3 business days after publication.
• The author does not serve as an officer of any Hong Kong listed company covered in the report.
• The author has no financial interests in the Hong Kong listed companies covered in the report.