20240725-招银国际-Fixed_Income_Daily_Market_Update_5页_859kb

Fixed Income Market Summary - July 25, 2024

Market Overview

• Overview of Asian G3 bond benchmark, reviewing commentary and seeking value-added improvement.
• Appreciation for support in fixed income research and polls.

Key Market Movements

• Asian IG bonds overall: Widen 1-3bps.
• HYUELE: Widen 1-2bps following Q2 2024 results.
• New DAESEC '27: Tightened 2bps.
• Trading desk highlights:
  • Chinese SOEs/TMT inclined toward better selling; long-end of HAOHUA/CNOOC/TENCNT slower by 07-11 pips.
  • AT1s: HSBC 6% Perp/BNP 8% Perp higher by 02 pips.
  • Korean bonds: Old DAESEC '27 widened 2bps; new pricing at CT3+145 for USD 400mn bond.
  • Macau gaming stocks lower by 02-05 points.
  • Indian bonds: PIELIN '28 up another 0.1 point.
  • LGFVs: ZHHFGR '25 and CPDEV 25/26 higher by 1-2 points.

Detailed Analysis

Sino-Ocean Restructuring

• Company: Sino-Ocean released offshore debt restructuring plan for USD 5.636bn.
• Plan: Involves maturity extensions and debt-to-equity swaps, with 60% of debt converted to non-interest-bearing MCB or new bonds.
• Impact on bondholders: High conversion prices (e.g., min HKD5.52-16.37), with 69-86% mandatorily swapped for equities. Conversion fees due by specified dates.
• Key terms:
  • New bonds: Amortizing over 3-8 years, subject to deferred triggering events.
  • MCB: Convertible with min prices linked to share performance.

Macro News Recap

• US markets weak: S&P down 231%, Dow 125%, Nasdaq 364% on July 24.
• US PMI: Manufacturing 49.5, Services 56.0 vs expectations.
• Bond yields: Long-term US Treasuries rallied, with yields up to 454% on 30-year.

New Issues and Pipeline

• Offshore Asia new issues:
  • Mirae Asset Securities: USD 400mn, 3yr bond, 5.5% T+145, Baa2/BBB-.
  • Pipeline:
    • Bank of Communications: USD, 3yr SOFR+105.
    • Dongxing Securities: USD, 3yr, 5.8%, BBB-.
• Onshore primary issuances: 104 credit bonds issued, total RMB124bn.

Analyst Comments

• Sino-Ocean restructuring: Plan criticized for favoring equity conversion with substantial dilution to bondholders, limited options.
• China Cinda Asset Management: Expected 1H24 net profit drop up to 50% due to reduced distressed debt income.
• SK Hynix: Q2 revenue rose 125% YoY to USD11.9bn, EBITDA up to USD6.2bn.

Important Notes

• Author certification: Authors certify views reflect personal beliefs and no direct compensation ties.
• Disclosures: CMBIGM not liable for reliance on information; markets involve risks.