20250227-招银国际-Fixed_Income_Daily_Market_Update_5页_866kb

Fixed Income Credit Commentary - 27 Feb 2025
Glenn Ko, CFA & CPA Team (Hong Kong)

Key Market Updates

Yield Tightening and Bond Performance

• HSBC Float ‘29 and ‘31: Tightened by 10bps and 20bps respectively (from SOFR+103 and SOFR+129). High-yield bonds from ANZ/WSTP (30-33s) widened by 1-2bps, while VNKRLEs (27-29s) declined by 0.3 pts.

• UPL LIN (525 Perp): UPL may redeem its USD400mn bond by issuing a new one at a coupon below 7%. The existing bond’s coupon will reset in May at 5Y US Treasuries + 386.5%. Moody’s treats the bond as equity, while S&P assigns 50% equity status. Fitch views it as debt.

• NWSZF: Adjusted EBITDA dropped 45% YoY to HKD36bn (USD4.58bn), with 28-29s unchanged.

• Bank and Corporate Bonds: JP/AU bank papers (Mizuho, NAB, WSTP, ANZ) widened 2-4bps. Chinese corporates like JD.com, Qihoo, and Lenovo saw mixed performance.

• India: UPL is considering redeeming its LIN 525 Perp via USD bond issuance. Nikesh bonds surged due to structural changes.

Onshore and Offshore Activity

Onshore Credit Bonds

• 101 credit bonds were issued yesterday, raising RMB145bn. Cumulative issuance for the month reached RMB1.113tn, a 64.4% YoY increase.

Offshore New Issues (Feb 2025)

• China: Issued 170mn SGD bonds by Chengdu Dongfangguangyi, Doha Finance, and HSBC with maturities ranging from 3-5 years and coupons tied to SOFR.

Macro and News Highlights

• US Markets: S&P (-0.47%), Dow (+0.37%), Nasdaq (-1.35%). Feb Conference Board’s Consumer Confidence Index was 98.3 (lower than expected). U.S. yields tightened, with 2-,5-,10-, and 30-year yields at 4.07%, 4.12%, 4.30%, and 4.55%.

• India: RBI revised microfinance risk weights to 100%.

• China: Capital injection of RMB400bn (USD55bn) into banks via new sovereign bonds. Hong Kong lowers stamp duty on homes priced below HKD4mn to HKD100.

Analyst Recommendations

• The UPL LIN 525 Perp trades at a neutral valuation due to limited upside and low liquidity. Recommended Offshore Asia perps include PCORR, SMCGL, and CMBHK.

Disclaimer:
CMB International Global Markets Limited certifies that the views expressed accurately reflect its personal analysis. Investors should independently evaluate strategies and consult financial advisors. The information provided is for reference only and does not constitute investment advice.