Banks - India: USD supply returns, but relative value favors AT1s: OW new AXSBIN Perp

Research evidence excerpt

Banks - India: USD supply returns, but relative value favors AT1s: OW new AXSBIN Perp

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Banks - India

USD supply returns, but relative value

favors AT1s: OW new AXSBIN Perp

Credit Analysis

India IG fins. issued USD1.85bn; prefer AT1s over seniors 25 June 2026

India IG financials saw strong USD bond supply in recent weeks, with USD1.85bn issued. Global Emerging Markets | Corporate

The India senior bonds complex was also repriced moderately wider (c.5bp). Based on Credit

current valuations, we still find value in capital bonds and we add coverage on AXSBIN Asia | India

Banks6.875 Perp nc’31 (AXSB AT1) at OW. We expect net AT1 redemptions in India,

supporting stronger technicals. AXSB’s weaker fundamentals have been fully priced in, Lefu Li, CFA

too. On senior bonds, we add coverage on both the new AXSBIN 5.348 2031 and Research Analyst

Merrill Lynch (Hong Kong)

POWFIN 5.32 2031 at MW. Valuations for both appear fair, with more supply expected +852 3508 2142

(see report RBI push for PSU offshore borrowing may drive near-term supply overhang); lefu.li@bofa.com

however, both offer moderate risk premiums vs HDFCB’31 (OW). We still prefer HDFCB Rachna Jain, CFA Research Analyst

seniors to others given the former’s better-than-peers’ fundamentals. See report: Add Merrill Lynch (Singapore)

coverage on the new HDFCB’31 senior bond with OW. +65 6678 2972 rachna.jain2@bofa.com

Expect better technical support for India AT1s…

AXSB AT1 trades at 250bp/6.7% for G-spread/YTC with dollar price still above par.

Exhibit 1: BofA recommendationsValuation looks attractive, as: 1) we expect strong technical support for this AT1 We see better value in AT1s than in seniors

(USD500mn outstanding), as HDFCB and AXSB are likely to see net AT1 redemptions