Asia Credit Monday Morning Ideas: OW A$ AZJAU/PNHAU hybrids; OW new HDFCB’31

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Asia Credit Monday Morning Ideas: OW A$ AZJAU/PNHAU hybrids; OW new HDFCB’31

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Asia Credit Monday Morning Ideas

OW A$ AZJAU/PNHAU hybrids; OW new

HDFCB’31

Morning Call

We highlight some of our views, thoughts and trade ideas 22 June 2026

This week we have ideas from Australia corporates and Indian banking sector. Global Corporate Credit

Asia Pacific

Initiate Aus rail freight: A$ AZJAU/PNHAU hybrids key OW

Asia Pacific Credit Rsch Grp

We initiate coverage on Pacific National (ticker: PNHAU; rated: BBB-/Stable by S&P) and Merrill Lynch (Singapore)

Aurizon (tickers: AZJAU / AZOAU; ratings: Baa1/Stable by Moody's and BBB+/Stable by Joyce Liang

S&P), two leading operators in Australia’s rail freight market that together account for Research Analyst Merrill Lynch (Singapore)

the majority of rail freight volumes in the country. We view Aurizon as a defensive +65 6678 0408

integrated credit, underpinned by its regulated Central Queensland Coal Network, which joyce.liang@bofa.com

provides strong cash-flow visibility and stability, complemented by improving haulage Lefu Li, CFA Research Analyst

dynamics. In contrast, Pacific National represents a more evolving, higher-beta credit, Merrill Lynch (Hong Kong)

with management focused on balance sheet repair and maintaining IG ratings, alongside lefu.li@bofa.com

potential shareholder changes and strategic optionality. From a valuation perspective, Xiang Gao, CFA Research Analyst

we see better relative value in subordinated hybrids. Aurizon’s A$ AZJAU ’55C’30 Merrill Lynch (Singapore)

(A$99.7) stands out, offering ~6.3% carry in AUD terms and 6.4% YTC to first call date in xiang.gao@bofa.com

May’30 with IG ratings (Baa2/BBB- by Moody’s/S&P); we see incentives for the company SiriusResearchChanAnalyst