Asia Credit Monday Morning Ideas: OW AXSB AT1; OW NCIAU 12.5% ‘31

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Asia Credit Monday Morning Ideas: OW AXSB AT1; OW NCIAU 12.5% ‘31

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Asia Credit Monday Morning Ideas

OW AXSB AT1; OW NCIAU 12.5% ‘31

Morning Call

We highlight some of our views, thoughts and trade ideas 29 June 2026

This week we have ideas from India financials and Australia corporates. Global Corporate Credit

Asia Pacific

OW the new AXSB AT1 on stronger technicals expected

We reiterate OW on the new AXSBIN 6.875 Perp nc’31 (AXSB AT1) on strong technical JoyceResearchLiangAnalyst

support expected and attractive valuation. The bond currently trades at 260bp/6.8% for Merrill Lynch (Singapore)

+65 6678 0408

G-spread/YTC with dollar price at 100.5. This looks attractive, as: 1) we expect strong joyce.liang@bofa.com

technical support for this AT1 (USD500mn outstanding), as HDFCB and AXSB are likely Xiang Gao, CFA

to see net AT1 redemptions totaling USD1.6bn in Aug and Sep 2026. The supply risk is Research Analyst

Merrill Lynch (Singapore)

very different from Indian seniors; 2) we believe the fundamental risk is quite +65 6678 0941

manageable. we view AXSB’s CET1 ratio (low-14%) as sufficient and expect a stronger xiang.gao@bofa.com

profitability in FY27 with the key drivers of lower credit cost, improving NIM and a Lefu Li, CFA

Research Analyst

higher fee income; and 3) With a low-BB rating, AXSB AT1 looks compelling vs. Indian HY Merrill Lynch (Hong Kong)

non-bank financing companies. The yield level is similar on duration adjusted basis, but +852lefu.li@bofa.com3508 2142

ASXB has stronger fundamentals. More importantly, we think the AT1’s structure risk is Sirius Chan

quite manageable given AXSB’s sufficient capital buffer (See report here for more Research Analyst

details : USD supply returns, but relative value favors AT1s: OW new AXSBIN Perp).