20220825-招银国际-Fixed_Income_Daily_Market_Update_7页_876kb

CMBI Credit Commentary Summary

Core Content Overview

This document provides a comprehensive market update and analysis from the Fixed Income Department of CMB International Securities Limited (CMBIS), covering recent market movements, debt restructuring plans, macroeconomic news, and important disclosures related to fixed income instruments.

Key Market Highlights

Onshore Market Activity

• Quiet morning: Markets were overall quiet due to a typhoon in Hong Kong.
• LGFV (Local Government Financing Vehicles) activity: Onshore buyers showed continued interest in LGFV.
• Hybrid (HY) properties: Chinese HY properties were actively bought by hedge funds, with CIFIHG, CENCHI, and CHINSC bonds due 24-26s rallying 3-7 points.
• Primary issuances: 89 credit bonds were issued yesterday, totaling RMB88bn. Month-to-date, 1332 credit bonds were issued for RMB1343bn, a 10.4% year-over-year decrease.

Offshore Market Activity

• Top Performers:
  • IDASAL 6.757 11/15/48 (+7.7 pts)
  • CHINSC 7 1/4 04/19/23 (+7.5 pts)
  • CENCHI 7.65 08/27/23 (+7.4 pts)
  • FTLNHD 6.8 08/05/23 (+6.1 pts)
  • GRNLGR 6 1/8 04/22/23 (+6.0 pts)
• Top Underperformers:
  • MSFLCZ 3.15 03/10/24 (-3.3 pts)
  • CHIOIL 4.7 06/30/26 (-2.1 pts)
  • FUTLAN 4.45 07/13/25 (-1.9 pts)
  • RISSUN 9 1/2 09/17/24 (-1.8 pts)
  • HRINTH 4 1/4 11/07/27 (-1.4 pts)

Sectoral Movement

• Financials: Tier 2 bonds tightened 2-3 bps.
• AMC (Asset Management Companies): HRINTH'27 cash price dropped 1.5 pts, while others remained flat.
• TMT (Technology, Media, Telecommunications): The 10-year part of the curve tightened another 1-2 bps, likely a passive move.
• IG (Investment Grade) properties: Firmed up ~1 pt due to RM buying front-end and FM covering long-end.
• Industrials: FOSUNI front-ends rose 3-4 pts after headlines, while CHIOIL'26 fell 2 pts.
• Ex-China HY: Indonesia Aluminum Corp IDASAL'48 rose 7.5 pts.

Debt Restructuring Plan for Jiayuan

Plan Summary

• Issuer: Jiayuan (6 USD offshore bonds, total o/s amount USD1.3bn)
• Process: Par-par exchange to extend maturities for 27 months and cut coupon to 6.5%.
• No upfront repayment: Only incentive/instruction fee of 0.25 per 100 is offered.
• Minimum acceptance level: 90% of the o/s amount of each USD bond.
• RSA (Revised Security Agreement): Required from bondholders as a back-up. Approval threshold for RSA is 75% of the total o/s amount (USD1.3bn).
• Expiration dates:
  • Exchange and consent: 7 Sep'22
  • RSA instruction fee: 8 Sep'22

Key Bonds Involved

Macro News Recap

• U.S. stock indexes: Rebounded slightly on Wednesday, ending a three-day decline.
• S&P 500: +0.30%
• Dow Jones: +0.18%
• Nasdaq: +0.28%
• U.S. home sales: Pending home sales index dropped 1.0% in July, the lowest since April 2020.
• U.S. Treasury yields: Edged higher, with the 2/5/10/30-year yields at 3.36%/3.20%/3.11%/3.32%, respectively.
• China's economic measures:
  • 19 measures to stabilize economic growth.
  • Added RMB300bn developmental financial tools.
  • Supported state-owned power producers to issue RMB200bn bonds.
• Hubei bail-out fund: RMB5bn set to purchase distressed assets and ensure delivery of new houses.

New Issues and Pipeline

Priced New Issues

Pipeline New Issues

Important Disclosures

• Conflicts of Interest: CMBIS may have investment banking relationships with the companies discussed, which could affect the report's objectivity.
• No Liability: CMBIS and its affiliates are not liable for any losses or damages incurred from relying on the report.
• Use Only for Intended Recipients: The report is for the use of intended recipients only and may not be reproduced or distributed without prior written consent.
• Regulatory Restrictions:
  • The report is not intended for distribution to U.S. retail investors.
  • In the UK, it is only provided to persons falling under specific legal categories.
  • In Singapore, it is distributed by CMBI (Singapore) Pte. Ltd. (CMBISG), an exempt financial adviser.

Author Certification

• The author certifies that the views expressed accurately reflect their personal views and that no compensation is directly or indirectly related to the report's content.
• The author confirms they and their associates did not trade in the stocks covered in the last 30 days and will not do so within 3 business days after the report's issue.

Contact Information

• Glenn Ko, CFA: (852) 3657 6235 | glennko@cmbi.com.hk
• CMBIS Fixed Income Department: Tel: 852 3761 8867 / 852 3657 6291 | fis@cmbi.com.hk

Disclaimer

• CMBIS or its affiliates have investment banking relationships with the issuers covered in the report within the preceding 12 months.
• The report is prepared solely for information purposes and does not constitute investment advice.