20231005-招银国际-Fixed_Income_Daily_Market_Update_5页_953kb

Fixed Income Commentary Summary (5 Oct 2023)

Market Sentiment & Overview

Market sentiment recovered after UST yields widened due to stronger-than-expected US labor market data. Asian investment-grade (IG) benchmark spreads tightened by 1-3bps, leading to profit-taking in front-end names. The AMC sector showed better buying demand, while HRINTH spreads rose by 0.5-1pt. China State Engineering (CHINSC) is exploring holistic debt management following a non-payment of a syndicated loan, which triggered a default event on its USD bonds.

Key Bond Analysis

• AACTEC: The company announced further repurchases of USD bonds, focusing on AACTEC '26 and '31. Tender prices estimated at 84.8 and 69.6, respectively. Analysts maintain a buy recommendation based on sufficient liquidity and bond yield pick-ups.
• LIFUNG: The tender cap on LIFUNG 5 08/18/25 was raised by USD100mn to USD272.5mn, with outstanding amount decreasing from USD522.5mn to USD331.2mn. Bond price unchanged.
• CHINSC: Non-payment of USD61mn loan amortization led to default; the company is appointing an external advisor for comprehensive debt restructuring.

Trading Desk Comments

Global markets show volatility: US 10/30yr yields widened by 10-15bps, Asian IG spreads widened by 1-5bps. Chinese SOE/TMT benchmarks and high-beta stocks like TMT experienced cross-betting; European AT1s and Asian properties remained weak. Top performers include GRWALL and INDOIS, while top underperformers include MPEL and GZHRCB.

Macro News Recap

US markets rebounded with S&P 50%, Dow 0.39%, and Nasdaq 1.35% gains. US Sep ADP employment rose by 89k (below expectations). US Sep services PMI was 50.1, and UST yields retreated, flattening the yield curve.

Analyst Comments Summary

• CHINSC: addresses debt restructuring post-default.
• AACTEC: positive outlook due to liquidity and acquisition plans.
• LIFUNG: progress in debt reduction via bond tender offers.

Additional Notes

Offshore Asian new issues were paused during National Day holiday. Increases in existing issues were limited amid higher rates and USD strength.

Disclaimer

This report includes author certification for accuracy and independence, but CMBIGM has investment banking relationships with some issuers, creating potential conflicts of interest. No liability for reliance on the information; values may fluctuate based on market factors.