APAC Credit Roundup: US Economy, US HG, Asia Insurance, Cathay Life, HK Property

研报英文原文证据摘录

APAC Credit Roundup: US Economy, US HG, Asia Insurance, Cathay Life, HK Property

on core

solvency to limit subordinated bond issuance. Taiwan insurers are going through a period of

reduced visibility in their fundamentals as they transition to ICS and we don’t see positive

catalysts in the near term. For more details, please see the joint report with our equity research

colleagues here. (Matt/Emma)

Cathay Life – Decent June earnings

Cathay Life's (bond ticker: CATLIF) net income for June grew 28% m/m to NT$11.4bn, bringing

YTD net income to NT$46.2bn. First-year premium (FYP) increased 32% m/m in June to NT

$43bn, while annualized FYP (APE) reached NT$6.9bn. Balance sheet trends were positive,

with overall net worth rising by more than NT$450bn YTD to NT$959.7bn, and the equity-to-

asset ratio exceeding 11%, both at record highs. The company continued to strengthen its FX

volatility reserve, with the balance exceeding NT$130bn as of end-June.

We initiate with a Neutral recommendation on the 5.5% 2041 bond with a call date in 2036.

Offered at z+161bp (SOT+119bp, $97.8, 5.8%), the bond trades more than 30bp behind the 2034

bullet subordinated bond. We have an Underweight recommendation on the ’34 largely due to

valuations, but we think the pickup on the newer 2041 / ‘36c bond is sufficient to merit a more

balanced view. The upside risk would be an improvement in premium growth, which would

support profitability in the transition to IFRS 17 and TW-ICS. A downside risk would be

volatility in profitability and solvency metrics on the back of the new accounting and solvency

frameworks. (Matt/Emma)

HK Property – Home prices pull back after 11% YTD gain; expect

<5% gains in 2H26

We published a joint credit/equity Property Data Monitor weekly report yesterday (link). Over