APAC Credit Roundup: Asia Credit Outlook, CITIC Bank International, China food delivery industry, Continuum

Research evidence excerpt

APAC Credit Roundup: Asia Credit Outlook, CITIC Bank International, China food delivery industry, Continuum

unities prevailing and select alpha potential emerging in emma.xing@jpmorgan.com

oversold segments, defensive sectors, and improving credits. Please see our full report J.P. Morgan Securities (Asia Pacific) Limited

here. (Matt) EM, Economic and Policy Research

China CITIC Bank International - 3.25% AT1 Redemption Mahmoud Harb (65) 6882-1640

China CITIC Bank International (bond ticker: CINDBK) announced the redemption mahmoud.harb@jpmorgan.com

of its US$600 million 3.25% additional Tier 1 (AT1) on the first optional call date JPMorgan Chase Bank, N.A., Singapore Branch

(FORD), July 29. We believe this was expected given Hong Kong issuers’ track record Emerging Markets Strategy

of redemption at the FORD. Next month’s redemption is supported by a solid 14.8% AC Fariha R Ahmmed

common equity Tier 1 ratio. Thus, even with the reduction in Tier 1 capital after the (44-20) 7134-8537

redemption, common equity capital leaves plenty of headroom above minimum fariha.ahmmed@jpmorgan.com

capital requirements. In terms of the economics of the call decision, the instrument J.P. Morgan Securities plc

would have reset to a spread of 253bp over Treasuries if extended, which may not be

compelling in this environment of historically tight spreads. We drop coverage of the

For key risks and catalysts not already3.25% AT1 on the back of the redemption announcement. This is part of a regional

described in this report, please refer to thetrend, and we estimate that Asia’s AT1 market has declined by US$3.3 billion this

year, including the announcement from CINDBK. (Matt) most recent Emerging Markets Corporate

Coverage Report.

China food delivery industry - New regulations improve