20220706-招银国际-Fixed_Income_Daily_Market_Update_5页_713kb

CMBI Credit Commentary Summary

Core Content

This document provides a detailed analysis of the fixed income market in China, highlighting key market movements, macroeconomic developments, and specific issuer updates. It also includes insights from the trading desk and analyst comments, along with information on new issues and market conditions.

Main Market Movements

• Chinese IG Space: The market remained unchanged to slightly weaker, with the 2s/10s yield curve inverting again.
• Financials: Spreads widened by 5-10 bps, and selling flows remained dominant.
• TMT Sector: JD, Meituan, and Xiaomi saw spread widening of 5-10 bps.
• LGFVs/SOE Perps: Initial muted activity turned into more active trading in the afternoon, with valuations reaching equilibrium. Longer-dated papers saw stronger demand.
• Chinese HY Space: Most papers were unchanged or down 1-2 points. Property benchmarks fell 0.5-2 points, with Powerlong Real Estate Holdings (PWRLNG) down 2.9 points.
• Top Movers:
  • Top Performers: AGILE, YUZHOU, GRNLGR, XIAOMI, and JIAYUA showed positive price changes.
  • Top Underperformers: HONGSL, CSCHCN, LSEAGN, STCITY, and PWRLNG experienced significant price declines.

Key Issuer Updates

FUTLAN/FTLNHD

• Seazen Group entered into a MOU to sell its cinema chain for cRMB3bn.
• The sale is expected to improve liquidity but may not cover 2H22 maturities.
• Seazen has demonstrated strong funding access, including onshore MTN issuance and CRMW/CDS offerings.
• Buy recommendations are maintained, with a preference for longer-duration papers.

FOSUNI

• Fosun International announced the results of a tender offer, with USD291.4mn and EUR4.2mn of notes tendered.
• Remaining outstanding notes are USD88.4mn and EUR380mn.
• Fosun has non-core assets worth over RMB50bn for potential disposal.
• Hold recommendations are maintained due to high ST debt levels and prolonged offshore bond market weakness.
• S&P is expected to issue a negative rating action following interim results in August 2022.

Macro News Recap

• The U.S. stock market closed mixed, with the S&P 500 up 0.16%, Nasdaq up 1.75%, and Dow down 0.42%.
• The U.S. dollar reached its highest levels in 20 years against global peers.
• The Treasury 10y yield fell 7.5 bps, leading to the inversion of the 2s/10s curve for the first time in three months.
• The Treasury curve flattened, with yields at 2.82% for 2/5/10 years and 3.05% for 30 years.

New Issues

Offshore Asia New Issues (Priced)

• Guangxi Communications Investment Group: USD300mn, 3-year, 3.95% coupon, rating -/-/BBB
• Xi'an Baqiao Investment Holding: USD50.8mn, 34-month, 4.1% coupon, rating -/-/-
• Korea Gas Corp: USD500mn, 5-year, T+145 yield, rating Aa2/AA/AA-

Offshore Asia New Issues (Pipeline)

• No new issues in the pipeline today.

Market Conditions and Color

• Onshore Primary Issuances: 64 credit bonds issued with RMB104bn raised. Month-to-date total RMB206bn, a 2.1% yoy decrease.
• DALWAN: Dalian Wanda Commercial Management Group's put option exercised by RMB3.425bn holders.
• FTHDGR: Fantasia Holdings extended maturity of RMB724mn bonds to December.
• GRWALL: Moody's placed China Great Wall Asset Management under review for downgrade.
• LNGFOR: Longfor Group issued RMB1.7bn six-year domestic corporate bonds with 4.1% coupon.
• PWRLNG: Moody's downgraded Powerlong Real Estate Holdings to Caa2 and Caa3. The company proposed a one-year extension for RMB600mn private notes.
• RONXIN: Ronshine China's bondholders approved proposals for "19Rongxin01" and "19Rongxin02" bonds.
• SANLTD: Sand China filed a fourth amended registration statement for an exchange offer.
• SJMHOL: SJM Holdings' "Grand Lisboa" casino hotel locked down due to 12 COVID-19 cases.
• SSHGHK: Moody's downgraded Sansheng Holdings to Ca.
• VNKRLE: China Vanke proposed to issue up to RMB3.4bn corporate bonds to repay debts.
• WB: Weibo launched a USD1.2bn five-year senior unsecured loan at SOFR+128bps.
• YUZHOU: Yuzhou Group proposed a two-year deferral for RMB1.5bn private notes.
• ZHHFGR: Zhuhai Huafa Properties raised RMB3bn via five-year MTNs.

Disclaimer and Risk Information

• The report contains general information and does not constitute investment advice.
• There are risks involved in trading any securities, and past performance does not guarantee future results.
• CMBIS is not a registered broker-dealer in the U.S. and is not subject to U.S. research regulations.
• The report is intended for distribution to "major U.S. institutional investors" only.
• In Singapore, the report is distributed by CMBI (Singapore) Pte. Ltd. and may not be provided to non-accredited investors without consent.

Author Certification

• The author certifies that the views expressed accurately reflect their personal views on the subject securities.
• The author has no financial interest in the companies covered and has not traded in the stocks within 30 days prior to the report's release.

Contact Information

• Glenn Ko, CFA: (852) 3657 6235 | glennko@cmbi.com.hk
• James Wen: (852) 3757 6291 | jameswen@cmbi.com.hk
• CMBI Fixed Income: fis@cmbi.com.hk
• CMB International Securities Limited: Tel: 852 3761 8867/ 852 3657 6291

Important Disclosures

• The information is based on publicly available data and is not guaranteed for accuracy or completeness.
• CMBIS does not provide personalized investment advice.
• Investors are encouraged to consult professional financial advisors before making decisions.