APAC Credit Roundup: APAC Cross Regional Credit Weekly, China, New World/GLP, Indonesia, IIFL Finance, Indian Renewables

Research evidence excerpt

APAC Credit Roundup: APAC Cross Regional Credit Weekly, China, New World/GLP, Indonesia, IIFL Finance, Indian Renewables

curities; (2) defaulted

securities; (3) floating-rate notes; (4) EIR sensitivities; (5) perpetual securities; and (6) bond-

specific conventions. Among these changes, those relating to fixed-to-variable securities could

have market implications. Under the new rule, the reset date will be treated as maturity, and bonds

approaching the reset date will be excluded from the indices. With this change, four corporate

perps that have reset their coupons will be dropped from J.P. Morgan’s indices. These include:

(1) New World 10.131% perp (6.15% before reset); (2) New World 12.179% perp (5 1/4%); (3)

GLP 7.865% perp (4.5%); and (4) Far East Consortium 12.814% perp (7 3/8%) (Not Covered).

We do not expect this news to have a material impact on the bonds we cover. Their removal from

the indices could potentially lead to some weakening in demand from benchmark investors.

However, given the volatility of these perps over the past few years, we believe they have largely

rotated away from a more passive investor base towards those that focus on idiosyncratic stories.

As such, we do not expect their removal to lead to major selling. We maintain our OW ratings

on New World 10.131% and 12.179% perp. Both bonds have accrued and unpaid coupons (~19

pts for the former and ~14 pts for the latter by the next coupon payment dates in December 2026),

and we believe the company would have to settle these to remove the dividend stopper and

facilitate future fundraising from the capital markets. We are N on GLPSP 7.865% perp (58.25

offer, 14.75% YTM) as we do not expect the company to redeem the perp anytime soon. For