Fixed Income Trade Notes

PUBLIC#

10 December 2021

Fixed Income Trade Notes

PUBLIC#

Content

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Methanex Corp 5.25% 2029 (USD)

Peak Re BVI 5.35% perpetual c.2025 (USD)

Bristish Telecommunications PLC 3 December 2021

M&G plc 6.5% 2048 c.2028 (USD)

UPL Corp Ltd 4.625% 2030 (USD)

San Miguel 5.5% perpetual c.2025 (USD)

Power Finance Corp. 4.5% 2029 (USD)

21 September 2021

Shui On Development (Holding) Ltd 5.75% 2023 c.2021 (USD) 24 September 2021

Open Trades: USD

Description Date Published/Updated

29 September 2021

4 October 2021

18 October 2021

Scentre Group Trust 4.75% 2080 c.2026 (USD) and 5.125% 2080 c.2030

(USD) -

Open Trades: GBP

Open Trades: SGD

Description

17 September 2021

28 October 2021

29 October 2021

12 October 2021GLP Pte. Ltd. 4.5% perpetual c. 2026 (USD)

14 September 2021

27 August 2021

9 September 2021

Celestial Miles Ltd 5.75% Perpetual c.2024 (USD) 12 October 2021

7 October 2021

Franshion Brilliant 4% perpetual c.2023 (USD) 8 October 2021

MAF Global Securities 5.5% perpetual c.2022 (USD)

SoftBank 4.625% 2028 (USD)

NWD Finance 4.125% perpetual c.2028 (USD)

Fosun International (Fortune Star) 6.85% 2024 c.2023 (USD) and 5.95%

2025 c.2023 (USD)

GENM Capital Labuan Limited 3.882% 2031 (USD)

Nordstrom Inc 4.375% 04/2030 (USD)

Ford Motor Credit 4.125% 2024 (SGD)

Description Date Published/Updated

4 October 2021

Mapletree North Asia Commercial Trust 3.5% perpetual c.2026 (SGD) 20 August 2021

3 September 2021

Olam International 5.5% perpetual c.2022 (SGD) and 4% 2026 (SGD)

9 September 2021

Date Published/Updated

Shimao Group 5.2% 2027 c.2024 (USD) and 4.6% 2030 c.2025 (USD)

12 October 2021

12 October 2021

Virgin Media Secured Finance 4.25% 2030 c.2024 (GBP) 22 October 2021

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Key risks

Sustainalytics ESG risk rating

NEGL LOW MED HIGH SEVERE

Manpreet Gill Abhilash Narayan 0-10 10-20 20-30 30-40 40+

Head Senior

Investment UPL Corp. Ltd 28.9

Medium

RiskFICC Investment Strategy

Cedric Lam

Senior Investment Strategist

Source: Sustainalytics

We favour UPL Corp. Ltd (UPL) for its leading position in

the global agrochemical industry and its position as the

largest player in the post-patent crop protection market. We

also like its well-diversified geographical footprint across

regions and product groups. Moreover, UPL benefits from

relatively stable earnings, owing to the defensive nature of

the industry, as demand is less sensitive to recessions or

economic cycles such as the pandemic.

UPL Ltd - Consolidated financial information

In USD million equivalent, unless stated. As of Q1 FY 2022

(31 June 2021). LTM = Last 12 months

Source: Bloomberg, Standard Chartered

* As of FY2021 (31 March 2021)

The debt-funded acquisition of Arysta in January 2019

made UPL the fifth-largest agrochemical company globally.

The complimentary nature of the two companies in terms of

product portfolios and geographies further improves UPL’s

overall business profile. We also remain confident in UPL

for its collaboration with other players in the industry, which

could lead to improvements in research and development

and obtaining manufacturing rights to certain products.

In our assessment, UPL Corp. Ltd 4.625% 2030 (USD)

(ISIN: XS2189565992, Price: 105.673, YTM: 3.85%) offers

relative value compared with UPL Corp. Ltd 4.5% 2028

(YTM: 3.48%). It also stacks up favourably versus other

large agrochemical companies providing 162bps pick-up

over Bayer 4.375% 2028 (YTM: 2.31%) and 92bps over

Syngenta 5.182% 2028 c.2028 (YTW: 3.03%), after

adjusting for UPL’s smaller size.

Ratings downgrade risk to High Yield (HY) as S&P has

the company on negative outlook

Regulatory risks stemming from industry regulations that

can impact operations and restrict its manufacturing.

Low and negligible risk-rated companies constitute part of Standard

Chartered Bank’s Sustainable Investments universe, which is a

subset of the CIO office’s equity core universe

Total Debt* 3,336

Total Equity* 3,360

Total Debt/EBITDA* 2.9x

EBITDA/Interest Expense 2.9x

Total Debt/Total Assets 34.7%

Weather and crop-related risks due to the nature of the

industry

In Malaysia, this publication is meant for distribution to Sophisticated Investor who meets the

Securities Commission’s criteria for High Net Worth Individual or High Net Worth Entity. The

below information is distributed for general information only and is not a recommendation to

invest. If you are interested to invest, please speak to your Relationship Manager and complete

your suitability and risk assessment before making any investment decisions.

Wealth Management Chief Investment Office

28 October 2021, 7:00 PM SST

Fixed Income Trade NoteUPL Corp Ltd Summary of bond recommendations

Revenue, Adj (LTM) 5,342

EBITDA, Adj (LTM) 1,171

Net Income, Adj (LTM) 413

Total Assets* 9,627

UPL Corp Ltd 4.625% 2030 (USD) BUY

Rationale: Defensive credit, attractive yield

Aggressive M&A could lead to a further deterioration in

credit metrics

This is not a research report and has not been produced by a research unit. Important disclosures can be found in the Disclosures

Appendix.

Please note yields and spreads are indicative only. Sourced from

Bloomberg on 28 October 2021 at 6:29 pm SST

PUBLIC#

Standard Chartered Bank

Wealth Management Chief Investment Office | 28 October 2021, 7:00 PM SST

About the issuer

Bond structure

UPL Corp Ltd 4.625% 2030 (USD)

The issuer, UPL, operates primarily in the post-patent segment of the crop protection market, and through its subsidiaries,

it has successfully expanded its crop protection and post-harvest solution businesses. Its crop protection products include

fungicides, herbicides, insecticides, and plant growth regulators and fumigants. Its acquisition of Arysta in 2019

strengthened and expanded its portfolio of products as it offers crop protection solutions for niche and specialty crops.

UPL Limited recorded a revenue of USD 1,154mn (up 11.8% y/y) in Q1 FY22 (ending 30 June 2021), primarily due to

higher contribution from India, Latin America and North America, partially offset by lower revenues from Europe and the

Rest of the World. Its adjusted EBITDA increased 7.1% y/y to USD 241mn; however, the margin declined to 20.8% from

21.8% in the prior year due to higher employee benefits (21.8% y/y) and cost of sales (7.3% y/y).

The bond has a Change of Control put clause, wherein

investors can redeem the bond at 101 if 1) UPL transfers

substantially all its assets to any entity other than permitted

holders, 2) UPL ceases to be a subsidiary of UPL Ltd, 3)

any entity other than permitted holder acquires more than

35% of UPL Ltd, and 4) permitted holders cease to own

20% of UPL Ltd and there is a rating downgrade.

UPL is the holding company for all the international operations of its parent, UPL Ltd. As of 31 March 2021, UPL Ltd had a

78% stake in UPL. Based in India, UPL Ltd is a leading crop protection products company and the fifth-largest

agrochemicals company in terms of revenue with market access to 90% of the world’s food basket. It offers an integrated

portfolio of both patented and post-patented agriculture solutions for various arable and specialty crops, including

biological, crop protection, seed treatment and post-harvest solutions, covering the entire crop value chain. UPL Ltd has

1,421 patents and 13,932 products registered and in over 138 countries.

We first initiated the trade on this bond on 30 July 2020. Our latest

recommendation was a BUY on 30 March 2021. Our view is based

on a 12-month investment horizon.


Appendix.

Capital Structure Senior Unsecured

Maturity 16-Jun-1930

Coupon 4.625%


Key bond metrics

Currency USD

ISIN XS2189565992

Rating (S&P) BBB-

Issue Size 500mn

PUBLIC#

Total Debt/EBITDA 7.0x

Source: Company filings, Standard Chartered

Key risks


0-10 10-20 20-30 30-40 40+

Manpreet Gill Abhilash Narayan

Head

FICC Investment Strategy

Cedric Lam

Senior Investment Strategist Source: Sustainalytics




In our assessment, San Miguel Corporation 5.5% perpetual

c.2025 (USD)(ISIN: XS2207320701, Price: 103.000, YTW:

4.62%) bond offers attractive yield from a large diversified

conglomerate in South East Asia. It also stacks up

favourably when compared with senior perpetuals issued by

other Philippine conglomerates, such as Jollibee 3.9%

perpetual c.2025 (YTW: 3.76%) and Royal Capital BV

(International Containers Terminal) 5% perpetual c.2026

(YTW: 3.69%) after adjusting for difference in industry

concentration and a lower market cap.

In addition, we like San Miguel 5.5% perpetual for its bond

holder-friendly structure given its senior unsecured status

and high coupon step-up, which leads us to assign a high

probability of call at the first call date.


San Miguel Corporation 60.5Medium

Risk




Key-man risk in the form of Chairman and majority

shareholder Ramon Ang

Slower pace of vaccination in the Philippines could lead

to resurgence in cases and delay in economic recovery


Total Assets 39,971








Fixed Income Trade NoteSan Miguel Corporation Summary of bond recommendations

We favour San Miguel Corporation (SMC) for being one of

the largest diversified conglomerates in the Philippines and

the South East Asia. We derive comfort from its robust

operating track record and market leading exposure to

multiple key industries in the Philippines, such as food and

beverage, power generation and fuel refinery.

San Miguel 5.5% perpetual c.2025 (USD) BUY

Rationale: Attractive yield, relative value

San Miguel Corporation –Consolidated financial

information


(30 June 2021).Despite surging leverage (total debt/EBITDA) in recent

years, we remain confident in SMC for its capability in

generating stable profits and free cash flow. Moreover, the

rally in oil prices have improved its earnings from COVID

pandemic.

Net Revenue, Adj (LTM) 16,174



Regulatory and operational risk as the group operates in

multiple industries and continues to expand into new areas,

especially infrastructure


Appendix.

Total Equity 14,368

Total Debt 20,825

Cash and Cash Equivalents 7,105

EBITDA/Interest 2.9x

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About the issuer

Bond structure

San Miguel 5.5% perpetual c.2025 (USD)

The perpetual is ranked senior unsecured and is callable on

29 July 2025. If the perpetual is not called in 2025, the

coupon would step up by 500bps and would be reset at the

prevailing 5Y US Treasury rate + 10.237%. Coupon

payments are deferrable and cumulative.

The perpetual has a change of control put clause at 101.

However, if the perpetual is not called by the issuer, the

coupon would step up by 500bps. Change of control is

defined as when Top Frontier Investment holding together

with Privado holdings ceases to own at least 35% of the

voting power of San Miguel.

Established in 1890 as a single brewery in Philippines, San Miguel has grown into one of the Philippines’ largest and most

diversified conglomerates. San Miguel is one of the Philippines largest employers and its revenues accounted for around

4% of the country’sGDP in 2020. As of 18 October 2021, the group had a market capitalisation of USD 5.5bn (PHP

277.8bn) and its largest shareholders were Top Frontier Investment Holdings and Privado Holdings with a stake of 66.1%

and 15.7%, respectively. San Miguel has diversified into five key business groups: Food and Beverage, Packaging, Fuel

and Oil, Energy and Infrastructure. Some key brands under San Miguel include San Miguel Foods, San Miguel

Infrastructure, San Miguel Global Power and Petron Corp. to name a few.

San Miguel’s revenue increased 57.7% y/y to USD 4,337mn in Q2 FY21 as all segments recorded significant improvement

in earnings. It derived majority of its revenue from Fuel and Oil (44.3%), Food and Beverage (34.9%) and Power

Generation (15.8%), followed by Packaging (2.9%) and Infrastructure 2.1%). Consequently, its Adjusted EBITDA improved

to USD 713mn from USD 165mn in Q2 FY20, and its margin increased to 16.4% from 6.0%.

USD

ISIN XS2207320701

Rating (S&P) NR

Issue Size

Coupon Type Deferrable, cumulative


We first initiated the trade on this bond on 30 July 2021. Our view

is based on a 12-month investment horizon.


Appendix.



Maturity Perpetual

Call Date 29-Jul-2025

Coupon 5.50%

Coupon Reset 5Y UST + 10.237%

Key bond metrics

Currency

500mn

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Key risks


0-10 10-20 20-30 30-40 40+


Head


Cedric Lam







Total Equity* 11,179

Total Debt/EBITDA* 10.2x


Total Debt/Total Assets* 85.0%


27 August 2021, 5:15 PM SST

Fixed Income Trade NotePower Finance Corp Summary of bond recommendations

Consolidated financial information




Operating Income, Adj (LTM) 2,821

Net Income, Adj (LTM) 1,702

Total Assets* 106,027

Total Debt* 90,168

Senior Investment

Strategist

Low and negligible risk rated companies constitute part of

Standard Chartered Bank’s Sustainable Investments

universe, which is a subset of the CIO office’s equity core

universe.


Appendix.

COVID-19 risks: A slowdown in economic growth could

negatively impact earnings and asset quality

A dilution of the Indian government’s shareholding

could indicate a lower linkage with the governmentSustainalytics ESG risk rating

Concentration risk with exposure limited to the domestic

power sector

Power Finance Corp 24.8Medium

Risk

In our assessment, Power Finance Corp. 4.5% 2029

(USD) (ISIN: XS2013531061, Price: 107.321, YTM: 3.42%)

offers an attractive yield for a USD-denominated senior

unsecured bond. It stacks up favourably against other

governmentowned peers, such as ONGC 3.375% 2029

(YTM: 3.06%) and NTPC 4.5% 2028 (YTM: 2.88%), after

adjusting for differences in sector exposure and maturities.

It also offers a 58bps carry over Power Finance Corp.

3.75% 2027 (YTM: 2.84%) for roughly 1.5 years longer

maturity.

Downgrade risk to High Yield (HY) with ratings on a

negative outlook

We derive comfort from its long operating track record of

over 30 years, robust loan portfolio and stable capital

adequacy ratio (see About the issuer section). Moreover,

PFC plays a strategic role in the government’s power sector

initiatives and has material exposure to state-owned power

utilities. As of Q1 FY22 (ending 30 June 2021), c.84% of

the loan portfolio value was comprised of state contracts.

We also derive comfort from PFC’s strong ownership

profile. We are optimistic with the potential support received

from the government, owing to its ownership profile and

importance to the domestic power sector.

Basis: Relative value, attractive yield

Source: Bloomberg, Company reports, Standard Chartered *As

of FY21 (31 March 2021)

We favour Power Finance Corp (PFC) for its leading market

position in the Indian power financing sector and

classification as a domestic systemically important non-

deposit taking nonbanking financial company (NBFC).


Bloomberg on 27 August 2021 at 4:56pm SST


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About the issuer

Bond structure




Wealth Management Chief Investment Office | 27 August 2021, 5:15 PM SST

Key bond metrics

Currency USD

Coupon 4.5%


We first initiated the trade on this bond on 17 January 2020. Our

latest recommendation was a BUY on 24 February 2021. Our view



Appendix.

PFC’s adjusted net revenue increased 25.2% y/y to USD 951.4mn in Q1 FY22, primarily due to a 23.2% y/y increase in its

net interest income. Consequently, its adjusted operating income improved to USD 752.7mn from USD 606.7mn in the

prior year. As of Q1 FY22, PFC’s loan book stood at INR 3.7trn (up 4.6% y/y) and comprised of conventional power

generation (51%), transmission and distribution (38%), renewable power generation (10%) and others (1%). In addition, its

net non-performing asset ratio improved to 1.80% (from 3.15% in Q1 FY21) and capital adequacy ratio stood at 21.16%,

well above the regulatory requirement of 15.0%.

The bond has a change of control put clause, which allows

investors to redeem the bond at par if the Indian

government ceases to own over 50% of the voting rights or

issued share capital of the issuer.

ISIN XS2013531061

Rating (S&P) NR

Issue Size 600mn

Established in 1986, PFC is the largest NBFC in India providing financial assistance to the power sector. The company

provides financing to flagship government projects and fuel suppliers, equipment manufacturers and businesses in the

conventional and renewable energy sector. It has also set up several other business units, including power exchanges to

improve its business diversity. PFC is 55.99% owned by the Government of India and has a market capitalisation of USD

4.6bn (INR 342.8bn) as of 18 August 2021.

PUBLIC#


9 September 2021, 4:15 PM SST





Total Assets 319,038

Total Equity 7,032

Total Investments 279,051

SCR Ratio 198.0%

Return on Equity 118.7%

Key risks


0-10 10-20 20-30 30-40 40+


Head


Cedric Lam


M&G plc 6.5% 2048 c.2028 (USD)

Basis: Leading UK asset manager, relative value, attractive

yield

We like M&G plc (M&G) as it is one of Europe’s largest

asset managers with a strong asset portfolio and solid track

record of profitable operations. M&G is UK-based and has a

well-diversified geographic presence in 23 locations. It

helps minimise concentration risk, such as Brexit-related

impacts.

Furthermore, it has a broad range of income sources due to

its diverse mix of retail and institutional clients. We derive

comfort from M&G’s business execution and investment

expertise from its track record of relatively higher returns on

its managed funds, compared with its peers.

In addition, M&G has strong capitalisation with solvency

ratio of 198% for H1 21 (ending 30 June 2021), a surplus to

the regulatory requirement. We also view M&G’s recent

acquisition of Sandringham Financial Partners under its

wealth arm further expanding the company’s UK wealth

management business.

In USD million equivalent, unless stated. As of H1 2021 (30

June 2021). LTM = Last 12 months

Source: Bloomberg, Company reports, Standard Chartered


Bloomberg on 9 September 2021 at 3:18pm SST


Appendix.

Senior Investment

Strategist

In our assessment, M&G plc 6.5% 2048 c.2028 (USD)

(ISIN: XS1888930150, Price: 122.966, YTW: 2.90%) offers

attractive relative value versus AXA SA 5.125% 2047

c.2027 (YTW: 2.15%) and Aegon N.V. 5.5% 2048 c.2028

(YTW: 2.56%) after adjusting for differences in credit

fundamentals, ratings and call dates.

Prolonged impact of the COVID-19 pandemic could

deteriorate the company's earnings and fund flows.

Geographical risk stemming from Brexit-related events.

Risk of non-call could lead the investors holding the bond

for an extended period of time.

Longevity risk as changing trends in longevity and

emerging medical trends have a material impact on

profitability and solvency.

Summary of bond recommendations

Fixed Income Trade NoteM&G plc







M&G plc 22.3Medium

Risk




universe.

PUBLIC#


About the issuer

Bond structure

M&G plc 6.5% 2048 c.2028 (USD)

Coupon Reset

ISIN

Rating (S&P)

Issue Size

Capital Structure

Maturity

500mn

Subordinated

20-Oct-1948

20-Oct-2028


Next Call Date

USD

XS1888930150

BBB

Wealth Management Chief Investment Office | 9 September 2021, 4:15 PM SST

M&G is a leading multinational savings and investment company headquartered in London, serving around 5.3mn retail

and 800 institutional clients in 28 markets as of 31 December 2020. M&G operates through two key segments, (i) savings

and asset management (GBP 238.0bn AUM as of H1 21), which provides a range of retirement, savings and investment

management solutions; (ii) heritage (GBP 130.1bn AUM), which provides pensions, annuities, life, savings and investment

products. However, its heritage business is closed for new customers but may accept contributions from existing

policyholders.

Key bond metrics

Currency

In April 2021, Mike Evans stepped down as chairman of M&G plc after 2.5 years of service. M&G is on the search for a new

chair, while Fiona Clutterbuck (Senior Independent director) continues to act as the interim chair.

Total revenue during H1 21 surged by 588.2% y/y to USD 12.8bn owing to higher investment returns. It reported operating

income of USD 381.9mn (-64.5% y/y), while the margin deteriorated from 57.9% in H1 20 to 3.0% in H1 21, primarily due to

higher benefits and claims (+396.7% y/y) paid during the period. Furthermore, the solvency coverage ratio improved to

198% vs 164% in H1 20.

If capital requirements are not met, the Tier 2 bond cannot

be written down. Coupons can be deferred at the issuer’s

discretion, but it is cumulative. The coupon will reset to the

prevailing 5Y USD Treasury yield + 4.414% (initial spread +

1.00%), if the bond is not called on the first date.

Coupon

Coupon Type

6.50%

5Y UST + 4.414%

Deferrable, cumulative, non-

compounding

We first initiated the trade on this bond on 12 October 2018. Our

latest recommendation was a BUY on 25 March 2021. Our view is

based on a 12-month investment horizon.


Appendix.

The M&G Wealth arm acquired Sandringham Financial Partners, an independent financial advisor in August 2021, bringing

in more than GBP 2.5bn assets under advice and relationships with around 180 advising Partners acting on behalf of over

10,000 individual clients.

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Key risks


0-10 10-20 20-30 30-40 40+


Head


Cedric Lam


Product concentration in Methanol makes Methanex’s

financial performance susceptible to high volatility




universe.


Appendix.




Intense competition within the industry and from

substitutes

Government regulations and environmental-related

policies stemming from cross-country presence and

industry nature

EBITDA/Interest Expense

Net Debt/Equity

EBITDA, Adj (LTM) 641


Cash and Cash Equivalents 764

Total Assets 5,790

Total Debt

Senior Investment

Strategist

We like Methanex Corporation (Methanex), the largest

methanol producer in the world, for its industry leadership

and globally diversified supply chain.

The rebound in methanol prices with the global economic

recovery has strengthened Methanex’s financial

performance, deleveraging initiatives and cashflows, which

improved credit metrics. This led to a change in rating

outlook from negative to stable by S&P and Moody’s in

2021.

In our view, demand for methanol should continue to grow

steadily due to increased use of methanol in energy-related

applications due to its environmental and economic benefits

as a fuel. Therefore, we are optimistic with Methanex’s

decision to restart its Geismar 3 project with an aim to meet

surging global methanol demand.Total Debt/EBITDA




Source: Bloomberg, Company reports, Standard Chartered

2,884

Fixed Income Trade Note






Methanex Corporation Summary of bond recommendations

124.0%

Volatility in energy prices as nearly half of the methanol

demand is from energy-related applicationsSustainalytics ESG risk rating

Methanex Corporation 25.5Medium

Risk

Total Equity 1m709%

4.5x

6.3x

We also derive comfort from Methanex’s strong liquidity

profile. As of Q2 FY21, company has USD764mn in cash,

USD600mn undrawn construction facility and access to an

additional USD300mn under an undrawn revolving credit

facility with no debt maturities until the end of 2024.

In our assessment, Methanex Corporation 5.25% 2029

(USD) (ISIN: US59151KAL26, Price: 110.225, YTM: 3.80%)

offers an attractive yield for a BB-rated senior unsecured

bond, relative to a chemical/plastic product manufacturer

Westlake Chemical Corp 4.375% 2047 (YTM: 3.40%), after

adjusting for differences in maturity and ratings.

Methanex Corporation 5.25% 2029 (USD)




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About the issuer

Bond structure

Methanex Corporation 5.25% 2029 (USD)

Methanex’s adjusted revenue grew 108.5% y/y to USD1,068mn in Q2 FY21 on strong methanol demand and an increase in

methanol prices. Its adjusted EBITDA grew by 798.4% y/y to USD252mn in Q2 FY21, supported by higher revenue and

lower costs. The board of directors approved an increase in quarterly dividend to USD0.125 per share from USD0.0375 per

share, payable from September 2021.

Headquartered in Vancouver, Canada, Methanex is the world’s largest producer and supplier of methanol with around 13%

global market share in 2020. With strategically located manufacturing sites in Canada, Chile, Egypt, New Zealand, Trinidad

and Tobago and the US, it had over 9.2mn tonnes of total annual capacity in 2020, which is expected to increase over time.

Methanol is in demand across the world as it is used in both traditional chemical applications and energy-related

applications. China was Methanex’s largest customer destination by revenue in 2020 (31%), followed by Europe (18%) and

the US (16%).


Maturity 15-Dec-2029

Next Call Date 15-Sep-2029

Coupon 5.25%

Currency USD

ISIN US59151KAL26

Rating (S&P) BB

Issue Size 700mn



We first initiated the trade on this bond on 15 November 2019. Our


is based on a 12-month investment horizon


Appendix.

The bond has a change of control clause, requiring

Methanex to make an offer to redeem the bond at 101, plus

any accrued and unpaid interest if it ceases to own more

than 50% of the outstanding voting stock along with a rating

decline.

Key bond metrics

PUBLIC#

Key risks



0-10 10-20 20-30 30-40 40+

Nordstrom Inc. 14.0 Low Risk


Head Senior Investment Strategist


Cedric Lam





universe.

We like Nordstrom due to its position as a leading fashion

and retail department store operator in the US. Although

traditional retail operators have been challenged by online

sales channels over the last few years, Nordstrom has

remained largely resilient to changing industry trends with

the company rapidly adopting to digital sales and

distribution.

Although Nordstrom’s operating performance has been

improving post-pandemic, its recovery has lagged its peers.

However, we derive comfort from its strong liquidity, well

distributed debt maturity profile, cost-cutting measures and

tighter collaboration with brand partners.

Further, Nordstrom suspended dividends and halted share

buybacks in 2020 in response to COVID-19 related

pressures. We also favour its deleveraging measures and

believe the company is on track to reduce its leverage ratio

to approximately 3.0x by year-end.

In our assessment, Nordstrom Inc. 4.735% 2030 (USD)

(ISIN: US655664AT70, Price: 102.724, YTM: 4.00%) stacks

up as favourable against Kohl’s Corporation 4.25% 2025

(YTM: 1.59%) and other HY retail bonds such as Bath &

Body Works Inc. 5.25% 2028 (YTM: 3.12%) after adjusting

for differences in maturity and ratings.

Adverse impact on margins due to off-price product mix

and inventory constraints

Growing challenges from e-commerce could pressure

growth, margins and profitability


Net Debt/Equity 1574.3%








Fixed Income Trade NoteSummary of bond recommendations



(30 January 2021).

Revenue, Adj 13,400

EBITDA, Adj 1,446

268

Total Assets


4,706

9,230

Total Equity

Nordstrom Inc 4.375% 04/2030 (USD)

Net Income, Adj 66


Total Debt

Nordstrom Inc



A resurgence of the pandemic could affect business

operations and sales.


Appendix.



PUBLIC#


About the issuer

Bond structure

Nordstrom Inc 4.375% 2030 (USD)


Appendix.

Founded in 1901 as a retail shoe business in Seattle, Washington, Nordstrom is a leading retail department store in the

US. It offers an extensive selection of high-quality brand and private label merchandise focused on apparel, shoes,

cosmetics, accessories and home goods. The company’s two operating segments, Nordstrom and Nordstrom Rack,

accounted for 66% and 34% of net sales in H1 FY21. In July 2021, Nordstrom acquired minority interest in in the Topshop,

Topman, Miss Selfridge and HIIT brands jointly with online retailer ASOS.

Revenue improved by 96.4% y/y in Q2 FY21, reflecting the recovery from the impact of COVID-19 with the removal of

restrictions in 2021. EBITDA grew to USD 225mn from a loss of USD 120mn in the prior year, primarily due to higher sales

volume and improved merchandise margins. In July 2021, Nordstrom retired USD 500mn unsecured 4.0% notes due in

October 2021 using cash on hand.

Currency USD

Maturity 1-Apr-2030


Key bond metrics

We first initiated the trade on this bond on 11 December 2020. Our



The bond has a change of control call clause, which allows

the issuer to redeem the bond at 101 if (i) more than 50% of

the voting power is transferred and (ii) it is downgraded to

below Investment Grade (IG) within 60 days after a change

of control.

Call Date 1-Jan-2030

Coupon 4.375%


ISIN US655664AT70

Rating (S&P) BB+

Issue Size 500mn


PUBLIC#

Investment case

Shimao Group 4.6% 2030 c.2025 (USD)

Key risks


0-10 10-20 20-30 30-40 40+


Head


Cedric Lam



Summary of bond recommendations


Rationale: Relative value, attractive yield


Bloomberg on 217 September 2021 at 10:00 am & 12:30

pm SST

We like Shimao Group Holdings Ltd (Shimao) for its market

leadership and strategic exposure to Tier-1 and Tier-2 ties

in China with attributable land bank of roughly 44mn m2 as

of 1H FY21 (ending 30 June 2021).

We derive comfort from its execution track record over the

past few years. Shimao has recorded consistent increase in

contract sales while maintaining stable gross profit margin.

We also derive comfort from its prudent financial

management, which includes a strong balance sheet that

satisfied all the 3 red lines policy and low net gearing ratio.

Thus, we add Shimao Group Holdings 5.2% 2027 c.2024

[Green] (USD) (ISIN: XS2385392936, Price: 98.375, YTW:

5.56%) as we like the attractive yield offered by the bond.

We believe the bond offers attractive relative value when

compared to bonds such as Country Garden 5.125% 2027

c.2024 (USD) (YTW: 4.30%) and Sino-Ocean 4.75% 2029

(USD) (YTC: 4.94%) after adjusting for difference in ratings

and maturity date.

In addition, we retain Shimao Group Holdings 4.6% 2030

c.2025 (USD) (ISIN: XS2198427085, Price: 96, YTW:

5.17%) as we continue to find its yield on offer attractive.

The bond also offer relative value when compared to

Country Garden 4.8% 2030 c.2025 (USD) (YTW: 4.58%).







Rationale: Attractive yield, relative value





In USD million equivalent, unless stated. As of H1 FY 2021





Total Assets 97,034

Fixed Income Trade NoteShimao Group Holdings


Total Debt 25,233

Total Equity 25,490

Joint venture projects would limit transparency.

Regulatory risks might restrict the company’s business

operation and capital utilization.


Shimao Group Holdings 24.7Medium

Risk




universe.

Senior Investment

Strategist

A broad slowdown in China could negatively impact

property demand and the company’s profitability.

Escalating default risk could negatively impact industry

outlook


Appendix.

PUBLIC#


About the issuer

Bond structures



Appendix.


We first initiated the trade on this bond on 24 July 2020. Our latest

recommendation was a BUY on 30 July 2021. Our view is based

on a 12-month investment horizon.

Shimao Group Holdings 5.2% 2027 c.2024 [Green]

(USD)

The bond has a Change of Control clause where the

company is required to make an offer to repurchase the

bond at 101 if for example, Mr. Hui Wing Mau and affiliates

own less than 35% of Shimao’s voting stock AND there is a

rating decline.

Key bond metrics

Currency USD

ISIN XS2198427085

Rating (S&P) NR

Issue Size 300mn

XS2385392936

Shimao is a Shanghai-based leading integrated property developer focusing on developing residential, hotel, office and

commercial properties with a strong presence in Tier-1 and Tier-2 cities. As of 30 June 2021, it operated 424 projects

across 110 cities and had a land bank of 73mn sq. m. The group’s Chairman Hui Wing Mau owns approximately 65.0%

stake in the company.

Key bond metrics

Currency USD

ISIN

The group’s revenue increased 18% y/y to CNY 73bn during 1H FY21 (ending 30 June 2021). Contracted sales increased

by 38% y/y to CNY 153bn. It completed an aggregate contracted Gross Floor Area (GFA) of 8.6mn m2 during the period

with average selling price at CNY 17,700, which is among top-tier among Chinese property developers.



Our view is based on a 12-month investment horizon. We have not

recommended this bond previously.


company is required to make an offer to repurchase the

bond at 101 if for example, Mr. Hui Wing Mau and affiliates

own less than 35% of Shimao’s voting stock AND there is a

rating decline.

Coupon 5.2%

Rating (S&P) NR

Issue Size 748mn


Maturity 16-Jan-2027

Call Date 16-Sep-2024

Coupon 4.6%

Senior Unsecured

Maturity 13-Jul-2030


Capital Structure

PUBLIC#

Key risks


0-10 10-20 20-30 30-40 40+


Head


Cedric Lam


Basis: Dominant gaming operator in Malaysia, attractive

yield, relative value

We like Genting Malaysia for its dominant market position

in Malaysia being the sole licensed casino operator in the

country. We also favour its globally diversified casino and

resort footprint with over 40 properties across Asia, Europe,

and the Americas.

Although Genting Malaysia was recently downgraded by

one international rating agent due to delay in recovery

prospect from surging Delta variant, we derive some

comfort from its strong liquidity profile and balance sheet.

We believe its new outdoor theme park, Genting

SkyWorlds, scheduled to open in Q3 FY21, would help

generate incremental revenue in the medium term. We also

believe the prospect lifting of travel restrictions will further

strengthen earnings.

We continue to believe that GENM Capital Labuan

Limited 3.882% 2031 (USD) (ISIN: USY2700RAA06, Price:

99.734, YTM: 3.79%) offers an attractive relative value for a

senior unsecured bond rated Investment Grade (IG) from a

large casino and resort operator and stacks up as attractive

when compared to Sands China 4.375% 2030 (YTM: 3.72

%), adjusting for differences in geography and maturity. The

bond also stacks up as attractive versus other related

Genting bonds, such as GOHL Capital Limited 4.25% 2027

(YTM: 3.14%), after adjusting for differences in structure

and maturity.

The COVID-19 pandemic in Malaysia could lead to

prolonged restrictions and slower recovery in consumer

demand

Concentration risk as the majority of Genting Malaysia’s

total revenue is derived from Malaysia

Genting Malaysia Berhad 26.4Medium

Risk

Senior Investment

StrategistLow and negligible risk rated companies constitute part of



universe.


Appendix.


EBITDA/Interest Expense 45.5%



Please note yields and spreads are indicative only. Sourced

from Bloomberg on 24 September 2021 at 2:14 pm SST


Fixed Income Trade NoteGenting Malaysia Berhad Summary of bond recommendations

GENM Capital Labuan Limited 3.882% 2031

(USD)

Genting Malaysia Berhad – Consolidated financial

information



Revenue, Adj (LTM) 945


Net Income, Adj (LTM) -376







Total Assets 7,372

Total Debt 3,351

Total Equity 3,246


Loss of license exclusivity could affect domestic

operations and revenues

PUBLIC#


About the issuer

Bond structure


Appendix.

Genting’s overseas operations include Resorts World Casino in New York and Resorts World Catskills, one of four

commercial gaming licensed casinos in New York. Genting Casinios United Kingdom is one of the largest gaming

operators in the UK. Genting newest theme park, Genting SkyWorlds Theme Park, is set to open in Malaysia this year

following delays due to the COVID-19 pandemic.

The company’s adjusted revenue grew 6.4x y/y to USD 198.1mn in Q2 FY21 as the comparative period in FY20 was

adversely affected due to the temporary closure of resort operations worldwide due to the pandemic. Adjusted EBITDA

grew to USD 13.2mn in Q2 FY21 from a loss of USD 121.8mn the prior year, supported by the recovery from the effects of

the COVID-19 pandemic, especially in the UK and US markets.

The bond is issued by GENM Capital Labuan Limited, a

wholly owned subsidiary of Genting Malaysia, the guarantor

of the bond. Bondholders are subject to mandatory

disposition or redemption at the option of the issuer if i)

Genting Malaysia fails to apply for or maintain a license or

ii) is notified by a gaming authority that it will not be

licensed.

The bond also includes a change of control clause where

the issuer must offer to repurchase the notes at 101 if there

is i) a sale of substantially all of the assets of Genting

Malaysia or ii) a loss of outstanding voting stock in Genting

Malaysia to less than 50%: AND a loss of Investment grade.

Coupon 3.9%


We first initiated the trade on this bond on 30 April 2021. Our view


Currency USD

ISIN USY2700RAA06

Rating (S&P) BBB-

Issue Size 1bn


GENM Capital Labuan Limited 3.882% 2031 (USD)

Key bond metrics

The bond is issued by GENM Capital Labuan Limited, a wholly owned subsidiary of Genting Malaysia, a globally diversified

casino and resort operator founded in 1980. Genting Group, the parent company, has a 49.5% ownership in Genting

Malaysia. Operations in Malaysia accounted for 69% of Genting Malaysia’s revenue, in H1 FY21, while 16% was from the

UK and Egypt with 15% originating from the US and Bahamas. The company has three main revenue segments: Leisure

and Hospitality (92% of H1 FY21 Revenue), Property (3%) and Investment and Others (5%).

Maturity 19-Apr-2031



PUBLIC#

Key risks


0-10 10-20 20-30 30-40 40+


Head


Cedric Lam







Despite, the fluctuation in revenue due to the timing of

projects, we remain confident in Shui On owing to its stable

rental income from investment properties and financial

discipline. Moreover, it stacks up favourably versus some

larger developers in China due to its voluntary deleveraging

efforts in the past, which has enabled it to satisfy the three

limits in the Three Red Lines policy introduced by regulators

in China in 2020.

Total Debt 5,462

Total Equity 7,420


EBITDA/Interest Expense

Revenue could fluctuate as Shui On focusses on lumpy

large projects

Shui On Land Ltd 20.5Medium

Risk

Senior Investment

StrategistLow and negligible risk rated companies constitute part of



universe.


Appendix.

In our view, Shui On Development (Holding) Ltd 5.75%

2023 c.2021 (USD) [Green bond] (ISIN: XS2075800743,

Price: 100.107, YTM: 5.69%) offers attractive yield and

relative value compared with Shui On 6.25% 2021 (YTM:

5.48%). It also stacks up favourably versus other

developers in China such as CIFI Holdings Group 5.5%

2023 c.2021 (YTM: 5.38%).

A broad slowdown in China could negatively impact

property demand and the company’s profitability

The impact of COVID-19 on the demand for prime

commercial real estate could reduce rental income and lead

to a decline in property values




Fixed Income Trade NoteShui On Land Ltd Summary of bond recommendations

We favour Shui On Land Ltd (Shui On) for its proven track

record of developing and managing large-scale properties

primarily in Tier 1 and Tier 2 cities in China. We also like its

commercial and retail portfolio, positioning it as a leading

player in the commercial property space in Shanghai. Shui

On has also placed an emphasis on sustainability, with over

80% of its completed commercial projects having attained

green

certifications. We view the potential voluntary spin-off and

listing of its commercial investment property and property

and asset management businesses (see About the issuer

section) positively as it will improve the group’s

capitalisation.

Shui On Development (Holding) Ltd 5.75% 2023 c.2021

(USD)Basis: Short dated, relative value, attractive yield

Shui On Land Ltd – Consolidated financial information






Total Assets 16,989

8.2x



Please note yields and spreads are indicative only. Sourced

from Bloomberg on 24 September 2021 at 3:25 pm SST

PUBLIC#


About the issuer

Bond structure

Call Date 12-Nov-2021

Coupon 5.8%


We first initiated the trade on this bond on 27 November 2020. Our




Appendix.

ISIN XS2075800743

Rating (S&P) NR

Issue Size 500mn


Maturity 12-Nov-2023


The issuer, Shui On Development (Holding) Ltd, is a wholly owned subsidiary of Shui On. Incorporated in 2004 and

headquartered in Shanghai, Shui On is a mid-sized property developer and the flagship property company of Shui On

Group. The company is primarily engaged in the development, sale, leasing, management and long-term ownership of

large-scale commercial and residential mixed-use properties in prime city locations across five key Tier 1 and Tier 2 cities:

Shanghai, Wuhan, Foshan, Chongqing and Nanjing. As of 30 June 2021, Shui On was 55.68% owned by Shui On Group

and Vincent H S Lo.

On 4 August 2021, Shui On announced the potential spin-off and separate listing of its commercial investment property and

property and asset management businesses, which will be operated by Shui On Xintiandi by way of listing of its shares on

the Hong Kong Stock Exchange. After the issuance, the company will continue to remain a controlled subsidiary of Shui

On. In our view, the spin-off will improve the group’s capitalisation and help the business grow through focused strategies

and efficient deployment of management resources.

Shui On’s revenue grew in H1 FY21 to USD 1.9bn, owing to a significant increase in property sales versus the prior year

period, which did not have any property sales due to timing issues related to the completion of projects. Its adjusted

EBITDA increased to USD 680mn from USD 70mn in the prior year, while the EBITDA margin improved to 36.7% from

33.9%. Moreover, Shui On recommenced its dividend payments during the period, declaring a dividend of HKD 0.036 per

share, which it had stopped in FY20 due to the uncertainties arising from the COVID-19 pandemic. As of 30 June 2021,

Shui On had a total landbank of 8.4mn sq m.

Shui On Development (Holding) Ltd 5.75% 2023

c.2021 (USD) [Green]

The bond is guaranteed by the parent, Shui On. In addition,

it has a change of control clause, whereby the bond can be

called at 101 if Chairman Vincent Lo or any affiliates are the

beneficial owners of less than 35.0% of the total voting

power of Shui On.

Key bond metrics

Currency USD

PUBLIC#

Key risks



0-10 10-20 20-30 30-40 40+

Manpreet Gill Abhilash Narayan Fosun International 41.9 Severe Risk

Head


Cedric Lam






universe.









Fixed Income Trade NoteFosun International

37,603

Total Equity 29,886

Total Debt/EBITDA

Fortune Star 6.85% 2024 c.2023 (USD)


Fortune Star 5.95% 2025 c.2023 (USD)


8.5x

Risk of deterioration in leverage due to aggressive

debtfunded acquisitions

Key man risk given the earlier disappearance of the

chairman Guo Guangchang in 2015


Appendix.


Bloomberg on 29 September 2021 at 4:41 pm SST



Summary of views

Fosun International - Consolidated financial

information





Net Income, Adj (LTM) -1,535


Total DebtIn our assessment, Fortune Star 6.85% 2024 c.2023

(USD) (ISIN: XS2132420758, Price: 104.071, YTW: 5.24%)

offers an attractive yield for a USD-denominated bond and

stacks up as favourable versus China Oil & Gas 5.5% 2023

c.2021 (YTW: 3.84%) and Golden Eagle Retail Group

4.625% 2023 (YTM: 3.63%).

We retain Fortune Star 5.95% 2025 c.2023 (USD) (ISIN:

XS2238561794, Price: 101.997, YTW: 5.39%) as it offers

an attractive yield and stacks up as favourable versus

China Oil & Gas 4.7% 2026 c.2024 (YTM: 4.22%) after

adjusting for differences in call dates and rankings.

COVID-19 resurgence could impact its core businesses

Senior Investment

Strategist

We like Fosun International (Fosun) for its solid investment

track record and large diversified portfolio, spanning across

industries and geographies. Although leverage has been

elevated due to its debt funded investment strategy, we

derive comfort from its successful track record of

investments returns. We also derive comfort from its

relatively stable operating performance and earnings

growth despite volatile markets. We also see positive

development from recent rating outlook revision to stable

from negative, largely due to its stablising capital structure

and manageable liquidity. In our view, the global rollout of

vaccines and lifting of travel restrictions should also boost

its tourism-related revenue.

PUBLIC#


About the issuer

Bond structures

Fortune Star 6.85% 2024 c.2023 (USD) Fortune Star 5.95% 2025 c.2023 (USD)

Key bond metrics

Currency USD

ISIN XS2132420758

Rating (S&P) BB

Issue Size 600mn


Currency USD

ISIN XS2238561794

Rating (S&P) BB

Senior Unsecured

Maturity 19-Oct-2025

Call Date 19-Oct-2023

Coupon 5.95%



view is based on a 12-month investment horizon.

Capital Structure

Key bond metrics

The bond is issued by Fortune Star (BVI) Limited, an

indirect wholly owned subsidiary of Fosun, which is the

guarantor of the bond. The issuer can redeem the bond at

101% if (i) Fosun engages in the sale of all or substantially

all its assets, or (ii) Guo Guangchang and Wang Qunbin

own less than 40% in Fosun International; and the bond is

downgraded.

The bond is issued by Fortune Star (BVI) Limited, an

indirect wholly owned subsidiary of Fosun, which is the

guarantor of the bond. The issuer can redeem the bond at

101% if (i) Fosun engages in the sale of all or substantially

all its assets, or (ii) Guo Guangchang and Wang Qunbin

own less than 40% in Fosun International; and the bond is

downgraded.


Maturity 2-Jul-2024


Coupon 6.85%




Issue Size 700mn


Appendix.

In H1 FY21 (ending 30 June 2021), Fosun’s adjusted revenue increased 21.1% y/y to USD 10.8bn with the launch of new

products in the Health segment, growth in the Jewelry and Fashion Business unit and strong investment returns from the

insurance sector. Adjusted EBITDA decreased 49.6% y/y to USD 875.7mn owing to higher expenses.

Established in 1992, Fosun is one of the leading private sector conglomerates in China, operating under four core

businesses: Happiness (40.1% of H1 FY21 revenue), Wealth (27.7%), Health (27.2%) and Intelligent Manufacturing

(5.0%). It spans across 20 countries and regions across 5 continents. As of FY20, Fosun is 71.7% owned by Fosun

Holdings for which the beneficial owner is Fosun International Holdings. Fosun International Holdings is 85.3% owned by

Guo Guangchang and 14.7% owned by Wang Qunbin. In H1 FY21, Fosun’s subsidiary, Fosun Pharma, announced its plan

to enter into a joint venture agreement with BioNTech to localise the mRNA COVID-19 vaccine.

PUBLIC#

Key risks


0-10 10-20 20-30 30-40 40+


Head


Cedric Lam Source: Sustainalytics


We like Scentre Group Trust (Scentre) for its prominent one

as of the leading property groups with focus on retail

shopping centres in Australia and New Zealand. Despite

the ongoing COVID-19 pandemic, gross rent collection and

customer footfall increased in H1 FY21. We derive comfort

from its key investment portfolio comprising 42 Westfield

living centres, with strong franchise value, which offer a

diversified retail mix in Australia and New Zealand. We also

favour its resilient operations with an occupancy of 98.5%

despite lockdowns and 1,515 new leasing deals including

619 new merchant deals. Moreover, we expect the global

rollout of vaccines and relaxation of restrictions to provide

further tailwinds to rental collection in 2021. In July 2021,

S&P changed its outlook to stable from negative.

We believe, Scentre Group Trust 4.75% 2080 c.2026

(USD) (ISIN: USQ8053LAA28, Price: 106.604, YTW:

3.30%) offers attractive yield and relative value for an IG-

rated subordinated bond. It stacks up as attractive versus

other subordinated bonds, such as BP Plc 4.375%

perpetual c.2025 (YTW: 2.53%) and China Communication

Construction 3.65% perpetual c.2026 (YTW: 3.01%), after

adjusting for differences in business profile, ratings and call

dates.

We also believe Scentre Group Trust 5.125% 2080 c.2030

(USD) (ISIN: USQ8053LAB01, Price: 107.800, YTW:

4.08%) offers an attractive relative value compared with

other subordinated bonds, such as BP Plc 4.875%

perpetual c.2030 (YTW: 3.52%), after adjusting for

difference in business profile and ratings.

COVID-19 resurgence could impact rent collection

Economic downturn and rise in e-commerce could

impact portfolio occupancy and related business

performance

Senior Investment

Strategist


Scentre Group Trust 7.9Negligent

Risk




universe.

Concentration risk as majority of Scentre’s revenue is

derived from Australia


Appendix.


Summary of views

Total Debt 11,060

Total Equity 14,267



Scentre Group Trust 4.75% 2080 c.2026 (USD)


Scentre Group Trust 5.125% 2080 c.2030 (USD)










In USD million equivalent, unless stated. As of 1H FY 2021





Total Assets 27,474



Bloomberg on 4 October 2021 at 2:41pm SST

Fixed Income Trade NoteScentre Group Trust

PUBLIC#


About the issuer

Bond structures

Scentre Group Trust 4.75% 2080 c.2026 (USD) Scentre Group Trust 5.125% 2080 c.2030 (USD)

Scentre Group was formed in 2014 through the demerger of Westfield Group and the merger of its Australian and New

Zealand operating platform and management with Westfield Retail Trust. The company owns and operates the pre-eminent

living centre portfolio in Australia and New Zealand. Its retail real estate assets under management are valued at

USD50.1bn and shopping centre ownership interests are valued at USD34.3bn. It holds an exclusive, continuing and

royalty-free license to use the Westfield brand in Australia and New Zealand. As of September 2021, the group owns and

operates 42 Westfield living centres comprising over 12,000 outlets. The Group’s operational segments include property

investment (93% of H1 FY21 Revenue), property development and construction (5%) and property management (2%).

The company’s adjusted revenue increased 16% y/y to USD834mn in H1 FY21, reflecting the recovery from the COVID-19

pandemic despite a number of government lockdowns, with sales, excluding cinemas and travel, exceeding that of H1

FY19. Operating income increased 17% y/y as a result, while margins improved to 69.7% from 69.1% in H1 FY20.

ISIN USQ8053LAA28 ISIN USQ8053LAB01



Appendix.

Key bond metrics

Currency USD Currency USD

Call Date 24-Jun-2026 Call Date 24-Jun-2030

Coupon 4.75% Coupon 5.125%

Rating (S&P) BBB+ Rating (S&P) BBB+

Issue Size 1.5bn Issue Size 1.5bn

Capital Structure Subordinated Capital Structure Subordinated





Coupon Type

Source: Bloomberg, Standard Chartered Source: Bloomberg, Standard Chartered

Deferrable, cumulative



The bond is subordinated and is callable in June 2026. If

not called, the coupon will be reset to the prevailing 5Y US

Treasury rate + 4.379% (initial spread). If the bond remains

not called in June 2030 and June 2046, the coupon will be

reset prevailing 5Y US Treasury rate + 4.629% and

prevailing 5Y US Treasury rate + 5.379%. According to

S&P, the bond will lose equity credit after the first call date.

Coupons are deferrable but cumulative and compounding.

The bond is subordinated and is callable in June 2030. If

not called, the coupon will reset to the prevailing 5Y US

Treasury yield + 4.685%. If the bond remains not called in

June 2046, the coupon will be reset at prevailing 5Y US

Treasury rate + 5.435%. According to S&P, the bond will

lose equity credit after the first call date. Coupons are

deferrable but cumulative and compounding.


Maturity 24-Sep-2080 Maturity 24-Sep-2080

Key bond metrics

PUBLIC#

Key risks


0-10 10-20 20-30 30-40 40+


Head




Basis: Relative value, high-likelihood of call at first call date

Total Debt/Total Assets

We like Majid Al Futtaim Holding LLC (MAF) for its large-

scale and high-quality diversified real estate portfolio. We

derive comfort from its Investment Grade (IG) rating and

position as one of the highest-rated privately held

corporates in the Gulf Cooperation Council (GCC) region.

We also like its strong balance sheet and sufficient liquidity.

In addition, prudent policies have meant it has been able to

maintain its strong financial profile, with cash reserves

sufficient to cover 39 months of financing needs, as of H1

FY21. Moreover, with the ongoing roll-out of COVID-19

vaccinations, we expect MAF’s earnings and profitability to

pick up.

While there are no direct comparables, we continue to

believe MAF Global Securities 5.5% perpetual c.2022


offers an attractive yield and relative value from an IG-rated

junior subordinated bond. It stacks up as favourable versus

the DP World 3.908% 2023 (YTM: 1.43%) and ICD Funding

Ltd 4.625% 2024 (YTM: 2.06%) after adjusting for

differences in ranking, ratings and maturities. We also like

the bond due to its coupon step-up option and loss of equity

credit from S&P after the first call date, which we believe

incentivizes MAF to call the perpetual at the first call date.

Prolonged impact of the COVID-19 pandemic could

reduce economic activity and worsen the company’s

operating performance

Geographical concentration in Dubai might increase its

market risk

Risk of non-call could lead to investors holding the

perpetual for an extended period of time




universe.

Senior Investment

Strategist


Appendix.

Total Equity 7,445






Majid Al Futtaim Holding LLC 19.6 Low Risk

32.6%









Fixed Income Trade NoteMajid Al Futtaim Holding LLC Summary of views

MAF Global Securities 5.5% perpetual c.2022 (USD)

Majid Al Futtaim Holding LLC - Consolidated financial

information







Total Debt 5,114

Total Assets 15,702

PUBLIC#


About the issuer

Bond structure

In August 2021, MAF signed an agreement for an USD 1.5bn sustainability-linked, five-year revolving credit facility, which is

primarily based on ESG-related performance. In September 2021, MAF opened Oman’s fifth-largest shopping mall, Mall of

Oman, and 80% of gross leasable area was already leased.

In H1 FY21 (ending 30 June 2021), MAF’s adjusted revenue declined 9.7% y/y to USD 4.3bn, owing primarily to a 12.4%

dip in retail revenue due to business disruption and a challenging macroeconomic environment caused by the pandemic.

Adjusted EBITDA rose 0.3% y/y to USD 533.9mn, due to efficient cost management, resulting in an increase in the EBITDA

margin to 12.5% from 11.3% in H1 FY20. As of H1 FY21, MAF’s total debt to EBITDA improved to 4.2x from 4.5x in FY20.

MAF Global Securities 5.5% perpetual c.2022

(USD)

If the perpetual is not called at the first call date, the coupon

will reset to 5Y swap + 3.476%. The coupon will also step

up by 25bps in 2027 and 75bps in 2042.

We first initiated the trade on this bond on 13 March 2017. Our




Appendix.

Coupon 5.50%

Coupon Reset 5Y swap + 3.476%



Rating (S&P) BB+

Issue Size 500mn

Capital Structure Junior Subordinated

Maturity Perpetual

Call Date 7-Sep-2022


The issuer, MAF Global Securities Ltd, is wholly owned by joint guarantor MAF, a UAE-based company established in

1992. MAF is primarily engaged in the development and management of shopping malls, hotels, hypermarkets, residential

communities and supermarkets across the Middle East, Africa and Central Asia. Its hypermarket business is run under its

longstanding and successful regional franchise with international food retailer Carrefour. MAF currently operates 29

shopping malls, 13 hotels and over 1.5mn sqm of gross leasable land area of prime retail space. The company has

presence in 17 countries while deriving 48% of total revenue from the UAE in H1 FY21. MAF conducts its business under

four segments: Retail (83.6% of revenue for H1 FY21), Properties (11.3%), Leisure, Entertainment and Cinemas (LEC;

3.4%) and Lifestyle (1.7%).

Key bond metrics

Currency USD

ISIN XS1567903627

PUBLIC#

Key risks


0-10 10-20 20-30 30-40 40+


Head





Bloomberg on 8 October 2021 at 11:00am

Joint venture projects limit transparency Sustainalytics ESG risk rating

China Jinmao Holdings 22.7Medium

Risk

Thus, we add Franshion Brilliant 4% perpetual c.2023

(USD) (ISIN: XS1637332187, Price: 99, TW: 4.85%) to our

preferred list as we like the attractive relative value offered

by a senior perpetual issued by an investment grade-rated

developer with only 1.24 years left until next call date. The

perpetual compares favourably against China Resources

Land 3.75% perpetual c.2024 (USD) (YTW: 2.59%) after

adjusting for differences in ratings, call dates and operation

scale.

Regulatory risks might restrict business operations

Escalating default risk could negatively impact outlook

Risk of non-call might lead to a longer holding period





Total Equity 16,545

Total Debt 15,316




universe.

Senior Investment

Strategist


Appendix.












Revenue (LTM) 11,545

Investment case

We like China Jinmao Holdings (Jinmao) for its successful

operating track record, ownership rofile and balance sheet.

Franshion Brilliant is Jinmao’s fully-owned bond-issuing

entity.

Jinmao has a long and successful operating track record in

upper tier cities and ranks in the top 5 in the industry in

terms of contracted sales. Jinmao is about 35% indirectly

owned by Sinochem Group, one of the State-Owned-

Enterprises supervised by the central State-owned Assets

Supervision and Administration Commission (SASAC). This

offers the prospect of arental support, should that be

needed.

EBITDA (LTM) 581

Net Income (LTM) -34

Total Assets 68,155

While regulatory scrutiny on the industry since late 2020

has imposed a headwind for the industry, we believe

Jinmao’s strong balance sheet places it in a stronger

position relative to other developers. This reflects in its

investment grade rating and the fact that it met all the Three

Red Lines’ regulatory conditions based on its H1 FY21

results.

China Jinmao Holdings Summary of views

Franshion Brilliant 4% perpetual c.2023 (USD)

Rationale: Relative value, short duration

PUBLIC#


About the issuer

Bond structure

China Jinmao Group (Jinmao) is a mid-sized Chinese real estate developer that focused on high-end residential and

commercial premises development. It also engaged in commercial leasing and retail operations and hotel businesses in

major cities and popular vacation destinations in China. As of end-2020, the company is 35.15% indirectly owned by

Sinochem Group, one of the State-Owned-Enterprises supervised by the central State-owned Assets Supervision and

Administration Commission (SASAC). Jinmao has an established track record in upper tier cities. As of end-2020, it was

engaged in 270 city projects in 51 core cities, including Beijing, Tianjin, Shanghai and Guangzhou.


Appendix.

Coupon 4%


Key bond metrics

Rating (S&P) NR

Issue Size 500mn


Maturity Perpetual


Currency USD

ISIN XS1637332187

Franshion Brilliant 4% perpetual c.2023 (USD)




In 1H FY21 (ending 30 June 21), Jinmao has recorded a 135.2% y/y increase in total revenue due to an increase in gross

floor area (GFA) delivered. EBITDA also grew by 9.5% y/y despite a drop in EBITDA margin to 14.4% from 30.8% a year

ago. While gearing (measured by total debt to EBITDA) has surged to 10.1x from 9.1x a year ago, Jinmao has satisfied all

the Three Red Lines with its 1H FY21 results.


company has the option to make an offer to repurchase the

bond at 101 (prior 3 Jan 2023) or at 100 (on or after 3 Jan

2023) if for example, Sinochem Group ceases to be the

controlling and the largest shareholder of Jinmao AND

there is a rating decline. If the company decided not to

repurchase the bond, the coupon will be increased by 3%.


PUBLIC#

Key risks


0-10 10-20 20-30 30-40 40+


Head












19,645

Total Debt 3,432

Total Equity 7,527






Bloomberg on 12 October 2021 at 10:27am SST

NWS Holdings Ltd Summary of views

Celestial Miles Ltd 5.75% Perpetual c.2024 (USD)

Basis: Relative value, high coupon step-up

NWS Holdings Ltd - Consolidated financial information



Revenue, Adj 3,635

EBITDA, Adj 248

Net Income, Adj 227

Total Assets

32.0 High Risk




universe.

Senior Investment

Strategist


Appendix.

We like NWS Holdings Ltd (NWS) for its diversified

business portfolio, which includes toll oads, aircraft leasing,

insurance and construction services, from which it

generates around 81% of its attributable operating profit

(AOP). We also favour NWS for its strategic importance to

the parent – New World Development Company (NWD) –

being the flagship conglomerate subsidiary of the group.

In addition, we like the prudent financial measures, such as

reducing debt and monetizing non-core assets to improve

balance sheet healthiness. NWS also has a robust liquidity

profile, which is sufficient to cover its short-term debt. We

also view the business portfolio optimisation implemented

by NWS to simplify organisational structure to focus on and

expand core businesses positively.

In our assessment, the Celestial Miles Ltd 5.75%

perpetual c.2024 (USD) (ISIN: XS1940852145, Price:

102.702, YTW: 4.50%) offers attractive yield and relative

value, compared with senior bonds issued by its parent,

New World Development (NWD) 4.375% 2022 (YTM:

1.66%). It also compares favourably versus the NWD

Finance 5.25% perpetual c.2026 (YTW: 4.59%) after

adjusting for differences in call dates. Moreover, we like the

bond for its high coupon step-up, which suggests a

relatively high likelihood of call at the first call date. We also

derive comfort from the protection bondholders receive in

the event of a change of control (see Bond Structure on

page 2).

COVID-19 risks: Lockdown measures and government

policies such as toll-fee exemptions and border restrictions

may impact company operations significantly

Risk of non-call might lead to investors holding the bond

for an extended period of time

Execution and regulatory risk stemmed from the recently

acquired insurance business


NWS Holdings Ltd

PUBLIC#


About the issuer

Bond structure

Wealth Management Chief Investment Office | 12 October 2021, 10:45 AM SST

Celestial Miles Ltd 5.75% perpetual c.2024 (USD)

Key bond metrics

Currency USD

ISIN XS1940852145

Rating (S&P) NR

Coupon 6%


The issuer, Celestial Miles, is an indirect wholly owned subsidiary of NWS, which is subsequently the guarantor of the

perpetual. NWS, headquartered in Hong Kong, is the diversified industries flagship of NWD, which has a 60.9% ownership

in the company. NWS’s operations are primarily based in Hong Kong and China and its core businesses include toll roads,

commercial aircraft leasing, construction and insurance. It also manages a strategic portfolio, comprising companies in the

logistics and facilities management sectors.

NWS’s revenue increased 9.3% y/y to USD 3,635mn in FY21 due to higher contribution from Insurance (56.8% y/y), Road

(47.3% y/y) and Construction (21.9% y/y) segments. This was partially offset by lower contribution from the Facilities

Management business (down 78.4% y/y), combined with the disposal of its Transportation operations. Despite the increase

in revenues, its adjusted EBITDA declined 34.0% y/y to USD 248.2mn, resulting in a decrease in the EBITDA margin to

6.8% from 11.3% in the prior year due to increase in cost of sales (4.8% y/y) and selling, general and administrative

expenses (9.6% y/y). Furthermore, NWS partially redeemed its 4.25% senior notes due 2029 during the year. After the

redemption, USD 635.9mn in principal amount remained outstanding.

During FY21 (ending 30 June 2021), NWS continued its business portfolio optimisation through the disposal of non-core

assets. It sold NWS Transport (exiting the transportation sector) and all its interest in Zhujiang Power Station (Phase II) and

Derun Environment. NWS also reduced its interest in Wai Kee (construction company) from 23.0% to 11.5%. In addition, it

is in the process of disposing all its interest in SUEZ NWS (environmental services company) and Xiamen Container

Terminal Group (XCTG). Total proceeds from the above transactions is estimated to be roughly USD 1.8bn (HKD 14.2bn),

which will be utilised for capital expenditure and dividend distributions.

If the perpetual is not called at the first call date, the coupon

will step up by 500bps and be reset at the prevailing 5Y US

Treasury rate + 8.205%. Coupons are deferrable and

cumulative. Dividend stopper also restricts dividend

payments if the issuer defers coupon payments. In addition,

the issuer can redeem the perpetual at 100 if NWS lose

50% or more of voting rights in the issuer. The coupon will

be increased by 3% if the issuer does not redeem the

perpetual in such an event.

We first initiated the trade on this bond on 12 February 2021. Our




Maturity Perpetual



Issue Size 1.3bn



Appendix.

PUBLIC#

Key risks



0-10 10-20 20-30 30-40 40+

GLP Pte Ltd 15.4 Low Risk


Head Senior Investment Strategist







universe.






*Total debt = Loans and borrowings (short term + long term)

We favour GLP Pte Ltd (GLP) for its scale and leading

market position in the logistics and real estate industry with

presence in 17 countries. Despite its short operating

history, GLP has proven to develop and manage

businesses and properties successfully both organically

and via acquisitions. We also take comfort in the company’s

commitment towards maintaining its Investment Grade (IG)

credit rating, given that it is listed as a key performance

metric.

GLP also benefits from a well-diversified tenant mix with

over 1,800 customers across diverse sectors. In addition,

demand for warehousing has risen significantly since the

beginning of the pandemic, especially from E-commerce

and third-party logistic companies, which could improve its

earnings materially. Moreover, GLP’s fund management

arm provides the company with important source of capital

for growth and capital recycling, which is a positive to our

investment case.

We continue to believe GLP Pte Ltd 4.5% perpetual c.

2026 (USD) (ISIN: XS2340147813, Price: 95.675, YTW:

5.58%) offers attractive yield and relative value for a

subordinated perpetual from a leading investor and

operator of logistics properties and real estate. It stacks up

favourably versus GLP Pte Ltd 3.875% 2025 (YTM: 2.64%)

after adjusting for differences in ratings and call date. The

bond also seems fairly valued versus ESR Cayman 5.65%

perpetual c.2026 (YTW: 5.20%) after adjusting for

differences in scale, operating track

record and structure.

Concentration risk as nearly two-thirds of GLP’s total

revenue is derived from China

Lower transparency as GLP is a private, unlisted

company.

Total Equity 23,829

Total Cash 2,761

Source:Offering circular, Standard Chartered





Fixed Income Trade NoteGLP Pte. Ltd. Summary of views

GLP Pte. Ltd. 4.5% perpetual c. 2026

(USD)Rationale: Attractive yield, relative value

GLP Pte Ltd - Consolidated financial information

In USD million equivalent, unless stated. For 1H FY 2021

(ended 30 June 2021).

Revenue 845

Operating Income 537

Net Income 894

Total Assets 44,733

Total Debt* 15,469

Ratings downgrade risk as Fitch has GLP on negative

outlook

Rapid debt-funded expansion (or off-balance sheet

financing) could lead to a deterioration in credit metrics


Appendix.

PUBLIC#


About the issuer

Bond structure

GLP Pte. Ltd. 4.5% perpetual c. 2026 (USD)

Key bond metrics

Currency USD

ISIN XS2340147813


The issuer, GLP Pte Ltd, is one of the largest global investors and operators in logistics real estate and acts as the holding

company for a number of subsidiaries. Headquartered in Singapore, it was listed on the Main Board of the SGX-ST in 2010,

but was subsequently privatised and delisted from the exchange in 2018. GLP primarily invests and operates businesses in

logistics real estate, industrial property, cold storage, business parks, commercial and office spaces, mixed development

property, among others. It owns, manages and leases out an extensive network of approximately 2,700 completed

properties across China, Japan, Brazil, Europe, India, Vietnam and the US, with a combined gross floor area and gross

lease area of roughly 50mn sq. m. as of 30 June 2021. It also has an additional 29.2mn sq. m. of land held for future

development.

In addition, GLP offers fund management services, investing on behalf of many of the world’s largest pension funds,

sovereign wealth funds and financial institutions. As of 30 June 2021, it had USD 118bn of assets under management

(AUM), including USD 90bn in real estate AUM.

During H1 FY21 (ending 30 June 2021), GLP’s revenue increased 12.7% y/y to USD 845mn, primarily due to higher fund

management fees (123.2% y/y) and rental and related income (13.4%). It derived the majority of its revenue from China

(72.0%), followed by Japan (21.5%), Europe (4.2%), the US (1.6%) and Brazil (0.7%). However, GLP’s operating income

declined 3.4% y/y to USD 537mn and the margin fell to 63.5% from 74.1% in the prior year, due to an increase in property-

related expenses (25.1% y/y) and other expenses (67.0%).

The perpetual is subordinated and callable on 17 May

2026. If it is not called, the coupon will reset to the

prevailing 5Y US Treasury rate + 3.735%. The coupon will

step up by 25bps in 2031 and an additional 75bps in 2046.

Coupon payments are deferrable (cumulative and

compounding) at the issuer’s discretion. However, if

coupons are not paid in full, management cannot make any

equity distributions (dividend stopper) or buy back shares.

According to S&P, the bond will lose equity credit after the

first call date.

Maturity Perpetual

Call Date 17-May-2026

Coupon 4.50%

Rating (S&P) BB

Issue Size 850mn

Capital Structure Subordinated

We first initiated the trade on this bond on 14 May 2021. Our view






Appendix.

PUBLIC#

Key risks


0-10 10-20 20-30 30-40 40+


Head


Cedric Lam







We favour New World Development (NWD) for its

diversified business profile and proven operating track

record of over 50 years. We also like NWD’s core property

development business (accounted for 33% of FY21

revenue) for its land bank exposure to the Greater Bay Area

and robust growth in contracted sales for the year. We also

derive comfort from the steady increase in rental income

generated from its investment portfolio over the recent

years. Furthermore, it has a strong investment property

pipeline and aims to achieve recurring profits of 50% by

FY24 cf. 39% in FY21 through this segment.

In addition, we like NWD’s exposure to the infrastructure

sector (toll roads) through its subsidiary NWS Holdings Ltd,

which would generate sustainable cash flow to the

company. Although NWD has relatively high leverage, we

take comfort in its disposal of non-core assets to maximise

capital efficiency.

In our opinion, NWD Finance 4.125% perpetual c.2028


provides an attractive yield for a senior unsecured

perpetual, with its bondholder-friendly structure and the

high probability of a call (see Bond structure on page 2). It

also stacks up favourably versus other Hong Kong-based

developers and conglomerates such as CK Asset Holdings

Limited perpetual 3.5% 2023 (YTM: 3.71%) and Nan Fung

Group 5% 2028 (YTM: 3.50%) after adjusting for ratings,

call dates, structure and differences in business focus.

A broad slowdown in China and Hong Kong could

negatively impact property demand and the company’s

profitability

Risk of non-call might lead to investors holding the bond

for an extended period of time

Senior Investment

Strategist


New World Development 14.5 Low Risk




universe.









Fixed Income Trade NoteNew World Development Summary of views


New World Development - Consolidated financial

information

In USD million equivalent, unless stated. As of FY 2021 (30

June 2021)

Revenue, Adj 8,797

EBITDA, Adj 2,090

Net Income, Adj 310

Total Assets

Total Equity

80,742

Rationale: Attractive relative value

Total Debt 23,545


Appendix.

39,168

Regulatory risks owing to exposure to multiple industries,

especially real estate

PUBLIC#


About the issuer

Bond structure


10-Mar-2028

Rating (S&P) NR

Issue Size 1.2bn


Maturity Perpetual

Key bond metrics

Currency USD

ISIN XS2348062899


NWD Finance is a wholly owned subsidiary of NWD, the guarantor of the perpetual. Headquartered in Hong Kong, NWD is

one of the largest property developers with market capitalisation of USD 10.9bn (HKD 84.6bn) as of 6 October 2021. The

company’s core business areas include property investment and development, investment and operations of roads,

commercial aircraft leasing, insurance and construction in China, Hong Kong and Macau. As of end-June 2021, it had a

land bank with total gross floor area (GFA) of 9.38mn sq. ft. in Hong Kong and 5.69mn sq. ft. in China available for

immediate development.

In recent years, NWD has been restructuring its business through the disposal of non-core assets and recycling and

deploying the proceeds in businesses that provide better returns. In FY21, its major asset disposals include Suez NWS

(provides environmental services) and Citybus and NWFB (transportation services). Total proceeds raised from the

disposals during the year amounted to USD 2.3bn (HKD 18bn).

NWD’s revenue increased to USD 8.8bn (up 16.2% y/y) in FY21, primarily due to higher contribution from the Insurance

(56.7% y/y), Roads (47.2%), Construction (32.9%) and Property Development and Investment (16.4%) segments. This was

partially offset by lower revenues from the Hotel (33.0% y/y) and Other (41.7%) segments. Moreover, Hong Kong remained

the major revenue contributor with 64.7% of revenue, with Mainland China representing the major remainder. Its adjusted

EBITDA also increased 17.9% y/y to USD 2.1bn, which represents a margin improvement to 23.8% cf. 23.4% in FY20.

The perpetual is callable on 10 March 2028. If not called,

the coupon will reset to the prevailing 5Y US Treasury rate

+ initial spread + 300bps (step-up). It also has a change of

control call clause where the issuer, at its discretion can

redeem the perpetual at par if more than 50% of voting

rights of the issued capital of NWD is acquired. However,

the coupon will increase by 3% if the issuer opts not to

redeem the perpetual.



Coupon 4.13%


We first initiated the trade on this bond on 4 June 2021. Our view



Appendix.

Call Date

PUBLIC#

Key risks


0-10 10-20 20-30 30-40 40+


Head


Cedric Lam


Softbank Group Corp 26.0Medium

Risk




universe.

Mark-to-market earnings volatility from SoftBank’s

securities trading division, which involves the use of

derivatives

We like SoftBank Group for its long operating track record,

diversified operations across multiple sectors, geographical

regions and solid investment portfolio. Despite SoftBank’s

elevated debt levels, we derive comfort from its track record

of divestment, which demonstrates its ability to monetise

assets. We also like its stable cash flows generated by its

domestic telecom business, in addition to the fact that the

value of its equity investments cover 96% of its total debt.

We believe SoftBank Group Corp 4.625% 2028 (USD)

(ISIN: XS2361253433, Price: 95.525, YTM: 5.43%) offers

an attractive yield as well. It stacks up as favourable versus

Nissan Motors 4.345% 2027 (YTM: 2.61%) after adjusting

for differences in rating and maturities.

Key man risk from Founder and CEO Masayoshi Son, who

has significant influence over the company

Regulatory risk may negatively impact the value of

Softbank’s investment holdings

Senior Investment

Strategist









Fixed Income Trade NoteSoftBank Group Corp Summary of views



SoftBank Group Corp - Consolidated financial

information

In USD million equivalent, unless stated. As of Q1 FY

2022 (30 June 2021). LTM = Last 12 months









Total Debt 191,140

Total Equity 112,441




Appendix.

PUBLIC#


About the issuer

Bond structure


Appendix.

BB+

Issue Size 1bn

Maturity 6-Jul-2028


The bond is senior unsecured. It has a change of control

clause under which the company is required to make an

offer to repurchase the bond at 100 if any person other than

Masayoshi Son or his affiliates became the beneficial owner

of more than 50% of the voting stock along with a rating

downgrade.


In Q1 FY22 (ending 30 June 2021), Softbank Group’s adjusted revenue increased 52.4% y/y to USD 24.3bn owing to

higher gain on investments at Latin America Fund and loss of sale of business incurred in Q1 FY21. Adjusted EBITDA

grew 91.8% y/y to USD 13.8bn. As of Q1 FY22, total debt to EBITDA slightly weakened to 2.3x compared with 2.2x in FY21

owing to new debt issuances. In June 2021, the company issued hybrid notes for JPY 405bn due 2056 for early redemption

of domestic hybrid notes due December 2021. In July 2021, Softbank issued four USD-denominated senior notes totaling

USD 3.9bn and EUR-denominated senior notes totaling EUR 3.0bn. The proceeds from the issuances will be used for

refinancing and general corporate purposes.

We first initiated the trade on this bond on 9 July 2021. Our view is


Call Date 6-Apr-2028

ISIN XS2238561794

Rating (S&P)


Key bond metrics

Currency USD

Established in 1981, SoftBank Group is a holding company which invests in a variety of ventures in Japan and abroad.

Over the past decade, the company has transitioned from being a telecom provider to a strategic holding company. It is

largely owned by CEO/Chairman Masayoshi Son (26.7% stake as of March 2021). SoftBank’s investment portfolio has

been growing continuously, with benchmark investments such as Alibaba, Grab, Uber, DiDi, T-Mobile, NVIDIA, ByteDance

etc. Its recently established venture capital arm, SoftBank Vision Fund, focusses on innovative technology investments,

such as connectivity, Internet-of-Things and AI-focused companies.

Coupon 4.625%


PUBLIC#

Key risks


0-10 10-20 20-30 30-40 40+


Head


Cedric Lam


Solvency Ratio 4

Combined Ratio 98%

Return on Investment 3%


In our assessment, Peak Re BVI 5.35% perpetual c.2025


offers attractive yield and reasonable relative value versus

TongYang Life Insurance 5.25% perpetual c.2025 (YTW:

4.04%) and FWD Group 6.375% perpetual c.2024 (YTW:

5.60%) after adjusting for differences in the business

nature, ratings and duration.

Net Premium Earned 1,341

Operating Income 81

Net Income 87

Total Assets 5,661

Total Equity 1,487

Peak Reinsurance Co. LimitedBasis: Attractive yield, relative value


We favour Peak Reinsurance Co. Ltd (Peak Re) for its

established market position in Asia, growing global

presence and broad product offering. We also like Peak

Re’s performance and execution of strategy over its short

operating history, which has led to the rapid expansion of its

business; its gross written premiums (GWP) and total

assets grew at a CAGR of 29.5% and 30.5%, respectively,

from FY16 to FY20.

In addition, Peak Re has remained profitable since 2013.

Despite profitability remaining relatively weak (combined

ratio which measures incurred losses and expenses to

earned premium was 97.6% for FY20), we derive comfort

from its robust balance sheet and high capitalisation levels,

which are well above regulatory requirements. We expect

Peak Re’s profitability to improve gradually due to lower Life

and Health (L&H) claims following the COVID-19 vaccine

rollouts and its focus on offering tailored solutions.








Fixed Income Trade NoteSummary of views

Peak Reinsurance - Consolidated financial information


December 2020). LTM = Last 12 months



Relatively short operating history and low brand

recognition in the industry.

Geographical risks arising from the increasing

diversification of its business portfolio through

acquisitions in recent years.

Shareholder risks stemming from its major shareholder,

Fosun International, which is a High Yield rated investment

company with relatively high leverage that limits the

possibility of support if required.

Senior Investment

Strategist


Peak Reinsurance Co. Ltd NR -




universe.


Appendix.

PUBLIC#


About the issuer

Bond structure


Issue Size 250mn

Capital Structure Subordinated

Maturity Perpetual



Coupon 5.35%



Rating (S&P)

XS2239623437


Appendix.

NR

The perpetual is a subordinated obligation. If it is not called

on the next call date (28 October 2025), its coupon will be

reset to the prevailing 5Y US Treasury rate + 5.011%. If not

called on or before 28 October 2030, its coupon will be

reset to the prevailing 5Y US Treasury rate + 6.011%.

Coupons are deferrable and cumulative. A dividend stopper

clause restricts dividend payments if the issuer defers

coupon payments.

Key bond metrics

Currency USD

ISIN

Peak Re BVI, the issuer, is a wholly owned subsidiary of Peak Re (guarantor) and acts as its financing entity. Established

in 2012 and headquartered in Hong Kong, Peak Re is a privately owned global reinsurer owned by Fosun International

(87% stake) and Prudential Financial Inc. (13%). The company’s main line of business includes Property and Casualty

(P&C), L&H Reinsurance and Insurance-linked Securities (ILS). Peak Re is one of the fastest growing reinsurers serving

586 clients across 68 markets and is ranked 29 in the Top 40 Global Reinsurers for 2020 by S&P in terms of net

reinsurance premiums written.

On 27 July 2021, Peak Re announced it had reached an agreement to acquire the remaining 50% stake in NAGICO

Holdings Ltd (NAGICO), upon which it would become a wholly owned subsidiary. NAGICO is a composite insurer operating

in the Caribbean, and the transaction would further strengthen Peak Re’s strategy to diversify and expand its global

portfolio.

In FY20 (ending 31 December 2020), Peak Re’s total revenue increased 10.2% y/y to USD 1,515mn, primarily due to

higher net reinsurance premiums earned, and commission and investment income. It derived the majority of its GWP from

Asia Pacific (61%), followed by the Americas (29%) and EMEA (10%). It generated a return of 3.4% on invested assets in

FY20 versus 3.0% in FY19; however, its combined ratio dipped to 97.6% from 93.0% over the same period. While Peak Re

is still relatively small compared to its global reinsurance peers, it has maintained strong capitalisation levels with its

solvency ratio at 429% compared to the regulatory requirement of 200% under the Hong Kong regulatory standard.


We first initiated the trade on this bond on 23 October 2020. Our



PUBLIC#


0-10 10-20 20-30 30-40 40+

Key risks



Head


Cedric Lam



Appendix.

Thus, we add British Telecommunications 4.25% 2081

c.2026 (USD) (ISIN: USG15820EA02, Price: 99.75, YTW:

4.30%) as we like the attractive yield offered by a leading

UK telecom operator. The bond loses equity credit from

S&P at first coupon reset date, providing BT an incentive to

call it back. In our opinion, the bond offers compelling

relative valuation when compared to other European

telecommunication services provider, such as Vodafone

3.25% 2081 c.2026 (USD) (YTW: 3.71%) and Koninklijke

KPN 7% 2073 c.2023 (USD) (YTW: 3.13%) after

accounting for differences in maturity dates and credit

profiles.

Risk of leverage buyout may lead to shareholders and

management shuffle.

Intensive competition in the UK telecommunication

market could lead to earnings volatility and higher CAPEX

investment

Regulatory risks pertaining to the UK telecom sector


BT Group PLC 17.0 Low Risk




universe.

Senior Investment

Strategist

156%



Bloomberg on 3 December 2021 at 3:43 pm SST.







3 December 2021, 5:07 PM SST

Fixed Income Trade NoteBritish Telecommunications

PLC

Summary of views

British Telecommunications 4.25% 2081 c.2026 (USD)

Basis: Relative value, attractive yield, leading UK

telecommunication services provider

BT Group PLC –Consolidated financial information

In USD million equivalent, unless stated. As of 1H FY21 (30

September 2021).LTM = Last 12 months



We like British Telecommunications PLC (BT) for its long

and health operating track record since establishment in

1984 in the United Kingdom. BT is the key operating

subsidiary of BT Group PLC (BT Group) and we view its

market leadership in the telecommunications sector and the

diversified communication services provided, as a credit

positive. BT Group is engaged in a wide-ranging

transformation program through simplification of products,

process, IT systems and networks.

In November 2021, Reuters reported that both Patrick Drahi

(founder of Altice UK) and Deutsche Telekom intended to

raise their stake in BT Group. While it is still early to assess

the implications for the company, we derive comfort from

the Change of Control clause which should provide some

protection to investors (see Bond Structure).


Total Assets 69,435

Total Debt 30,730

Total Equity 16,241



Net Debt/Equity

PUBLIC#


About the issuer

Bond Structure

British Telecommunications 4.25% 2081 c.2026 (USD)


Appendix.

Issue Size 500mn


Maturity 23-Nov-1981

Next Call Date 23-Nov-2026

Coupon 4.25%

Coupon Structure Deferrable, cumulative


Our view is based on a 12-month investment horizon. We

have not recommended this bond previously.


Incorporated in 1984, British Telecommunications PLC (BT) is a telecommunications service provider that

primarily operates in the United Kingdom. BT is a wholly owned subsidiary of BT Group PLC (BT Group) and is

its principal operating subsidiary. It is currently one of the market leaders in the sector and is engaged in the

provision of fixed, mobile and converged connectivity solutions, including broadband, TV, networking, IT

services and related services and applications. It is engaged in the selling of products and services to

consumers, small and medium sized enterprises and the public sector. BT has 4 customer facing units,

including Consumer, Enterprise, Global and Openreach.

BT provides mobile and fixed broadband services to more than 30 million consumers and 1 million businesses

and public sector customers in the UK. It has a strong presence across the European continent with offices in

Spain, France, The Netherlands, Belgium, Germany, Switzerland, Italy, Sweden as well as Central & Eastern

Europe and Russia.

The bond is issued by British Telecommunications PLC and

is guaranteed by BT Group PLC. The bond is subjected to

call at par from 23 Nov 2026 to 22 Feb 2027 (inclusive). If it

is not called on 23 Feb 2027, the coupon will be reset at

prevailing 5Y US Treasury rate + 2.985%. If the bond

remains not called on 23 Feb 2032, 2037 and 2042, the

coupon will be reset at prevailing 5Y US Treasury rate +

3.235%. If the bond remains uncalled on 23 Feb 2047, the

coupon will be reset at prevailing 5Y US Treasury rate +

3.985%. There is a Change of Control clause wherein the

issuer could elect to redeem the bond at 101% if (1) BT

Group own less than 50% of stake in BT; AND there is a

rating downgrade (see Offering Circular for more detail).

Should the issuer choose to not call the bond in a Change

of Control event, the coupon would step-up by 500bp.

Key bond metrics

Currency USD

ISIN USG15820EA02

Rating (S&P) BB+

PUBLIC#

Key risks


0-10 10-20 20-30 30-40 40+


Head


Cedric Lam








Total Debt 17,516

Total Equity 20,362

Net Debt/Equity 0.8x

VMED O2 UK Ltd (Updated) Summary of views

Virgin Media Secured Finance 4.25% 2030 c.2024 (GBP)

Rationale: Attractive relative value

VMED O2 UK Ltd –Consolidated financial information

In GBP million equivalent, unless stated. As of Q2 FY 2021

(30 June 2021).

Revenue* 853

Operating Profit* 7

Net Profit* (113)

Total Assets 44,085

Margin compression given the highly competitive industry

dynamics

Regulatory changes in data protection laws and VAT, which

can negatively impact profit margins


Appendix.


VMED O2 UK (VMED O2) is a joint venture (JV) formed on

1 June 2021 through the merger of Virgin Media Inc. and

O2 UK’s operations. The combined entity is one of the

largest integrated telecommunication operators in the UK,

providing 99% data and voice coverage to the region’s

population. As of 30 June 2021, it had a subscriber base of

5.7mn fixed-line customers (of which 97% are broadband

connections) and 40.9mn retail and wholesale mobile

connections.

The company benefits from the leading and competitive

positioning of the combined entities: (1) Virgin Media is the

largest cable television and the fastest broadband provider

(market share of 20% of the total addressable broadband

market) and (2) O2 UK is the largest mobile network

operator (market share of 33% [in terms of subscriptions] in

2020). Moreover, VMED O2 has forecast synergies of USD

747bn (GBP 540bn) annually by 2026 through cross-selling

opportunities, cost savings, shared infrastructure and

capital spending (see About the issuer section on page 2).

In our assessment, Virgin Media Secured Finance 4.25%

2030 c.2024 (GBP) (ISIN: XS2062666602, Price: 99.061,

YTW: 4.39%) offers attractive yield and relative value for a

GBP-denominated secured bond issued by a leading UK

telecommunication services provider. It also stacks up as

attractive versus other GBP-denominated bonds issued by

UK telecommunication services providers, such as British

Telecommunications 3.125% 2031 (YTM: 2.85%) and Sky

Limited 4.0% 2029 (YTM: 1.90%), after adjusting for

differences in ratings and maturity dates.

*Represents one month (June 2021) of operations as the new entity

Execution risk arising from the joint venture partnership


VMED O2 UK Ltd NR -










PUBLIC#


About the issuer

Bond structure

Key bond metrics

Currency GBP

ISIN XS2062666602


This

Virgin Media Secured Finance 4.25% 2030 c.2024

(GBP)

The bond is guaranteed on a senior basis by VMED O2 and

certain subsidiaries. It is also secured by liens on

substantially all the assets of these subsidiaries. The bond

is subject to call on 15 October 2024 at 102.125. If not

called, the bond could be called on 15 October 2025 at

101.063 and on 15 October 2026 at 100.531, and

subsequently every same date until 2030.

Maturity 15-Jan-2030


Coupon 4.25%

Rating (S&P) BB-

Issue Size 635mn

Capital Structure 1st lien


Appendix.


We first initiated the trade on this bond on 18 June 2021. Our view


The issuer, Virgin Media Secured Finance Plc, is an indirectly wholly owned subsidiary of VMED O2, a leading integrated

communications provider operating in the UK. VMED O2 was formed on 1 June 2021 through a 50:50 joint venture

between Liberty Global Plc and Telefonica SA to combine the operations of its subsidiaries - Virgin Media and O2 UK.

VMED O2 provides a range of services, including broadband internet, video, fixed-line telephony and mobile services to

residential customers and businesses, and has a network of 430 retail stores and over 18,000 employees.

Through the JV, it expects to realise revenue synergies of USD 152mn (GBP 110mn), cost and capital expenditure savings

of USD 484mn (GBP 350mn) and USD 111mn (GBP 80mn), respectively, by mid-2026. However, it expects to incur

integration costs of USD 969mn (GBP 700mn) through to 2025. In addition, VMED O2 has sufficient spectrum bands to

have the largest 5G coverage footprint in the UK. The company, in July 2029, announced plans to fully upgrade its fixed-

line networks to full fibre-to-the-premise (FFTP) by 2028, which will further improve internet speeds and reduce

maintenance costs.

For the one month of operations (ending 30 June 2021), VMED O2 reported revenue of GBP 852.7mn, operating profits of

GBP 6.5mn and a net loss of GBP 112.5mn. On a pro-forma basis, its revenue for the six months period declined 2.2% y/y

to GBP 5,047.7mn; however, its EBITDA increased 2.8% y/y to GBP 1,863.9mn owing to a decline in cost of sales (2.4%

y/y) and other expenses (11.5%).

PUBLIC#

BUY

BUY

Key risks


0-10 10-20 20-30 30-40 40+


Head

FICC Investment Strategy Source: Sustainalytics

Cedric Lam


We like Olam International Ltd (Olam) for its scale, stable

operating track record and geographical diversification.

Olam has delivered steady business expansion resulting a

robust revenue CAGR of 13.4% during FY15 to FY20. Olam

also benefits from support from its largest shareholders,

Temasek (Singapore’s sovereign investment holding

company) and Mistubishi Corp., which have a 46.3% and

15.0% stake, respectively (as of 27 September 2021). In

our assessment, Olam’s relatively elevated leverage is

partly offset its strong liquidity of nearly USD 13.8bn (SGD

18.6bn; including credit lines) as of 30 June 2021.

Moreover, we derive comfort in Olam as 80-85% of its

revenues is derived from the food category, where demand

is less sensitive to recession or economic downcycles such

as the pandemic.

In our opinion, Olam International 5.5% perpetual c.2022

(SGD) (ISIN: SG7DJ3000005, Price: 101.033, YTW: 4.08%)

offers an attractive yield for a SGD-denominated junior

subordinated perpetual from a large listed company with a

high likelihood of call on the first call date due to its

highcoupon step-up. On a relative basis, it stacks up

favourably versus Olam International 6% 2022 (YTM:

2.27%) after adjusting for differences in maturity and

structure.

Olam International Ltd 5.5% Perpetual

c.2022 (SGD)

Basis: Relative value, attractive yield, high-coupon reset

Olam International Ltd 4% 2026 (SGD)








Fixed Income Trade NoteOlam International Ltd Summary of bond recommendations

Olam International Ltd – Consolidated financial

information





Net Income, Adj (LTM)




Appendix.


Olam International Ltd 33.5 High risk




Prolonged impact of the COVID-19 pandemic could lead

to disruptions in supply chains

Execution risk from its ongoing restructuring plan

The lack of a change of control clause means investors

are not protected if there is a significant change in

ownershipEnvironmental risk related to sourcing from external

suppliers


543

Total Assets 23,059

Total Debt 11,184

Total Equity 5,043






We also continue to believe Olam International 4% 2026

(SGD) (ISIN: SGXF63577419, Price: 100.792, YTM: 3.80%)

offers attractive yield and relative value for a senior

unsecured bond, as it offers a 104bps pick-up over Frasers

Property 4.25% 2026 (YTM: 2.77%).

PUBLIC#


About the issuer

Bond structures

Key bond metrics

ISIN

Issue Size

Rating (S&P)


This

Olam International 5.5% Perpetual c.2022 (SGD) Olam International 4% 2026 (SGD)

Rating (S&P) NR

Established in 1985 and headquartered in Singapore, Olam is a leading food and agri-business, supplying food ingredients,

feed and fibre to 17,300 customers worldwide. The company’s value chain spans over 60 countries and includes farming, a

direct and indirect sourcing network of an estimate 5mn farmers, processing, distribution and trading operations. Olam, with

a market capitalisation of USD 4.7bn (SGD 6.3bn; as of 27 September 2021), ranks among the top 30 largest companies in

the Singapore Stock Exchange in terms of market capitalisation

Since January 2020, the company has reorganised its portfolio into two operating groups – Olam Food Ingredients (OFI)

and Olam Global Agri (OGA) – both of which are held by the parent company, Olam. OFI comprises Olam’s supply chain

businesses in cocoa, coffee, edible nuts, spices and dairy, while OGA comprises grains, animal feed and protein, edible

oils, rice, cotton and commodity financial services. On 13 August 2021, Olam announced that OFI will be seeking a primary

listing on the London Stock Exchange and a concurrent listing on the Singapore Exchange, which is expected to be

completed by H1 FY22. The company is also evaluating a similar strategy for OGA.

Olam reported strong performance in H1 FY21 with revenue of USD 17.1bn (up 40.3% y/y), as sales volumes increased

11.5% y/y to 22.4mn metric tonnes. During the period, both OGA’s and OFI’s revenue increased 61.6% and 15.4% y/y,

respectively. Consequently, it generated adjusted EBITDA of USD 673.2mn (up 47.1% y/y), while the EBITDA margin

improved to 3.9% from 3.7% from the prior year.

The perpetual is junior subordinated and is callable on 11

July 2022. If not called, the coupon will be reset at the

prevailing SGD 5-year swap offer rate + 5.685% (initial

spread + 200bps). Coupon payments are deferrable at the

issuer’s discretion. However, if coupons are not paid,

management cannot make any equity distributions

(dividend stopper) or buy back shares.

Currency SGD

SGXF63577419

NR

600mn

Coupon 4%

Issue Size 350mn


Key bond metrics

Currency SGD


ISIN SG7DJ3000005

Maturity 24-Feb-2026


Maturity Perpetual

Next Call Date 11-Jul-2022

Deferrable, cumulative,

compounding




We first initiated the trade on this bond on 10 February 2021. Our



Appendix.

The bond is senior unsecured due on 24 February 2026.

Coupon 5.50%

Coupon Reset 5Y SGD Swap + 5.685%

Coupon Type

PUBLIC#

Total Equity 3,263


EBITDA/Interest 3.8x%


Key risks


0-10 10-20 20-30 30-40 40+


Head


Cedric Lam









20 August 2021, 5:45 PM SST

Fixed Income Trade NoteSummary of views

Mapletree North Asia Commercial Trust 3.5% perpetual

c.2026 (SGD)

Rationale: Attractive relative value, rare issuer

Mapletree North Asia

Commercial Trust


Senior Investment StrategistMapletree North Asia Commercial Trust 16.5 Low Risk




universe.


Appendix.

Structural changes in consumer behaviour could lead to

revenue and profit volatility.

Global semiconductor shortage might affect production,

which could lead to a decline in originations

Poor performance of its parent company could result in a

decline in new loans or leases and trigger a rating

downgrade




Bloomberg on 20 August 2021 at 12:13pm SST

We derive comfort from its defensive business nature and

stable operating performance. Occupancy rate of its key

premises have been consistently maintained at 97% or

above. The tenancy was marginally impacted by the COVID-

19 pandemic due to surging demand for business parks

from fast growing business sector, such as

telecommunications, media and technology sectors.

Thus, we add Mapletree North Asia Commercial Trust

3.5% perpetual c.2026 (SGD) (ISIN: SGXF49184645,

Price: 99.2, YTW: 3.68%) as relative value looks attractive

while compared to other SGD-denominated REIT bonds,

such as Ascendas REIT 3% perpetual c.2025 (SGD) (YTW:

2.92%) and Mapletree Industrial Trust 3.15% perpetual

c.2026 (SGD) (YTW: 2.87%) after adjusting for differences

in ratings, call dates and business focus.


December 2020). LTM = last 12 months

Revenue 387

Operating Income 296

Net Income 158

Total Assets 6,018

Total Debt 2,434

We like Mapletree North Asia Commercial Trust (MNACT)

for its geographically diversified property portfolio spread

across North East Asia. We also like the high asset quality

of its portfolio, which includes signature premises such as

the Festival Walk in Hong Kong.

MNACT also benefits from strong ownership profile.

Mapletree Investments Pte Ltd, the sponsor who currently

owns 37% of stake in MNACT, is wholly owned by

Temasek.

PUBLIC#


About the issuer

Bond structure



Appendix.

Coupon 4.125%





The bond is senior unsecured.

Key bond metrics

Currency SGD

ISIN XS2008854650

Rating (S&P) BB+

Issue Size 300mn

In Q2 FY21 (ending 30 June 2021), Ford Credit’s adjusted revenue declined 0.9% y/y to USD2.0bn as production

decreased due to semiconductor shortage, which affected originations. However, adjusted operating income increased

2.0x y/y to USD1.6bn, mainly due to favourable operating lease residual performance and a decline in credit loss reserve

owing to lower COVID-19-related losses. As of Q2 FY21, Ford Credit’s loss to receivables ratio improved to -0.1% from

0.2% in Q1 FY21 due to strong credit recoveries.

Wealth Management Chief Investment Office | 20 August 2021, 5:45 PM SST

Incorporated in 1959, Ford Credit is the indirect, wholly owned automotive financial services arm of Ford, which is one of

the largest auto manufacturers with a global market share of 4.9% for Q2 FY21. The two companies are bound by a

Relationship Agreement, whereby Ford Credit can request capital contributions from Ford if its managed leverage level

exceeds 11.5x for a calendar quarter. Ford Credit accounted for roughly 9.7% of Ford’s Q2 FY21 revenue. Ford Motor

Credit generates its revenue primarily by providing vehicle-related financing as well as leasing activities through its network

of dealers. This consists of payments made under retail instalment sales and dealer financing programmes, and also lease

contracts among others. In Q2 FY21, Ford Credit generated 86.9% of its revenue from Americas, while Asia Pacific and

Europe accounted for 9.0% and 4.1% of revenue, respectively. In June 2021, Ford Credit announced its plan to wind down

or sell its operations in Argentina and Brazil.



PUBLIC#

Total Loans 92,828

Total Debt 121,094

Net Interest Margin 3.10%

Loss to Receivables Ratio 0.1%

Total Debt/Total Assets 7.8x

Key risks

Manpreet Gill Abhilash Narayan NEGL LOW MED HIGH SEVERE

Head 0-10 10-20 20-30 30-40 40+

FICC Investment Strategy Strategist

Cedric Lam




Fixed Income Trade NoteFord Motor Credit Summary of views



Ford Motor Credit - Consolidated financial information


(30 June 2021). LTM = last 12 months











Ford Motor Credit 31.2 High Risk




universe.

Total Equity 13,070

Senior Investment


Appendix.



Bloomberg on 4 June 2021 at 2:53pm SST

We like Ford Motor Credit (Ford Credit) for its large size

and past track record of strong operating performance. We

also favour its solid ownership profile and good asset

quality that provide better earnings stability. Furthermore,

its limited exposure to operating leases minimise the impact

of loan delinquencies.

In addition, we derive comfort from its robust liquidity of

USD33.0bn (including credit lines) as of Q2 FY21. The

company is also well-capitalised. We also like its strong

balance sheet where debt maturities profile is evenly

spread.

We believe rising used vehicle prices and improving

economic conditions will further aid top-line growth and

strengthen its asset quality. Ford Credit’s rating outlook was

changed to stable from negative in H1 FY21 by two rating

agencies, following similar revisions to parent, Ford Motor

Company (Ford).

Thus, we prefer Ford Credit 4.125% 2024 (SGD) (ISIN

XS2008854650, Price: 102.277, YTM: 3.26%) due to its

attractive yield and relative value on offer from a BB+ rated

senior unsecured bond. It compares favourably versus USD

denominated Ford Credit 5.584% 2024 (YTM: 2.20%)

adjusting for differences in currency. It also stacks up as

attractive versus the USD-denominated General Motor

Financial Co. 3.95% 2024 (YTM: 0.95%) after adjusting for

differences in ratings and currency.

Rising auto loan delinquencies could lead to operational

losses

Regulatory risk from different operating geographical

regions.

Risk of non-call due to the lack of coupon step-up.


PUBLIC#


About the issuer

Bond structure



Appendix.

In Q2 FY21 (ending 30 June 2021), Ford Credit’s adjusted revenue declined 0.9% y/y to USD2.0bn as production

decreased due to semiconductor shortage, which affected originations. However, adjusted operating income increased

2.0x y/y to USD1.6bn, mainly due to favourable operating lease residual performance and a decline in credit loss reserve

owing to lower COVID-19-related losses. As of Q2 FY21, Ford Credit’s loss to receivables ratio improved to -0.1% from

0.2% in Q1 FY21 due to strong credit recoveries.

Incorporated in 1959, Ford Credit is the indirect, wholly owned automotive financial services arm of Ford, which is one of

the largest auto manufacturers with a global market share of 4.9% for Q2 FY21. The two companies are bound by a

Relationship Agreement, whereby Ford Credit can request capital contributions from Ford if its managed leverage level

exceeds 11.5x for a calendar quarter. Ford Credit accounted for roughly 9.7% of Ford’s Q2 FY21 revenue. Ford Motor

Credit generates its revenue primarily by providing vehicle-related financing as well as leasing activities through its network

of dealers. This consists of payments made under retail instalment sales and dealer financing programmes, and also lease

contracts among others. In Q2 FY21, Ford Credit generated 86.9% of its revenue from Americas, while Asia Pacific and

Europe accounted for 9.0% and 4.1% of revenue, respectively. In June 2021, Ford Credit announced its plan to wind down

or sell its operations in Argentina and Brazil.

4.125%

Key bond metrics

Currency SGD

ISIN XS2008854650

Rating (S&P) BB+

Issue Size 300mn

The bond is senior unsecured.








Coupon

PUBLIC#

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DERIVATIVES CONTRACT REFERRED TO IN THIS DOCUMENT, THIS DOCUMENT, TOGETHER WITH THE ISSUER

DOCUMENTATION, SHALL BE DEEMED AN INFORMATION MEMORANDUM (AS DEFINED IN SECTION 275 OF THE SECURITIES

AND FUTURES ACT, CHAPTER 289 (“SFA”)). THIS DOCUMENT IS INTENDED FOR DISTRIBUTION TO ACCREDITED INVESTORS,

AS DEFINED IN SECTION 4A(1)(a) OF THE SFA, OR ON THE BASIS THAT THE SECURITY OR SECURITIES-BASED DERIVATIVES

CONTRACT MAY ONLY BE ACQUIRED AT A CONSIDERATION OF NOT LESS THAN S$200,000 (OR ITS EQUIVALENT IN A

FOREIGN CURRENCY) FOR EACH TRANSACTION. Further, in relation to any security or securities-based derivatives contract, neither

this document nor the Issuer Documentation has been registered as a prospectus with the Monetary Authority of Singapore under the SFA.

Accordingly, this document and any other document or material in connection with the offer or sale, or invitation for subscription or

purchase, of the product may not be circulated or distributed, nor may the product be offered or sold, or be made the subject of an

invitation for subscription or purchase, whether directly or indirectly, to persons other than a relevant person pursuant to section 275(1) of

the SFA, or any person pursuant to section 275(1A) of the SFA, and in accordance with the conditions specified in section 275 of the SFA,

or pursuant to, and in accordance with the conditions of, any other applicable provision of the SFA. In relation to any collective investment

schemes referred to in this document, this document is for general information purposes only and is not an offering document or

prospectus (as defined in the SFA). This document is not, nor is it intended to be (i) an offer or solicitation of an offer to buy or sell any

capital markets product; or (ii) an advertisement of an offer or intended offer of any capital markets product. Deposit Insurance Scheme:

Singapore dollar deposits of non-bank depositors are insured by the Singapore Deposit Insurance Corporation, for up to S$75,000 in

aggregate per depositor per Scheme member by law. Foreign currency deposits, dual currency investments, structured deposits and other

investment products are not insured. . Taiwan: Standard Chartered Bank (“SCB”) or Standard Chartered Bank (Taiwan) Limited (“SCB

(Taiwan)”) may be involved in the financial instruments contained herein or other related financial instruments. The author of this document

may have discussed the information contained herein with other employees or agents of SCB or SCB (Taiwan). The author and the above-

mentioned employees of SCB or SCB (Taiwan) may have taken related actions in respect of the information involved (including

communication with customers of SCB or SCB (Taiwan) as to the information contained herein). The opinions contained in this document

may change, or differ from the opinions of employees of SCB or SCB (Taiwan). SCB and SCB (Taiwan) will not provide any notice of any

changes to or differences between the above-mentioned opinions. UAE: DIFC - Standard Chartered Bank is incorporated in England with

limited liability by Royal Charter 1853 Reference Number ZC18.The Principal Office of the Company is situated in England at 1 Basinghall

Avenue, London, EC2V 5DD.


Appendix.

PUBLIC#


Appendix.

Standard Chartered Bank is authorised by the Prudential Regulation Authority and regulated by the Financial Conduct Authority and

Prudential Regulation Authority. Standard Chartered Bank, Dubai International Financial Centre having its offices at Dubai International

Financial Centre, Building 1, Gate Precinct, P.O. Box 999, Dubai, UAE is a branch of Standard Chartered Bank and is regulated by the

Dubai Financial Services Authority (“DFSA”). This document is intended for use only by Professional Clients and is not directed at Retail

Clients as defined by the DFSA Rulebook. In the DIFC we are authorised to provide financial services only to clients who qualify as

Professional Clients and Market Counterparties and not to Retail Clients. As a Professional Client you will not be given the higher retail

client protection and compensation rights and if you use your right to be classified as a Retail Client we will be unable to provide financial

services and products to you as we do not hold the required license to undertake such activities. For Islamic transactions, we are acting

under the supervision of our Shariah Supervisory Committee. Relevant information on our Shariah Supervisory Committee is currently

available on the Standard Chartered Bank website in the Islamic banking section at: https://www.sc.com/en/banking/islamic-

banking/http://www.standardchartered.com/en/banking-services/islamic-banking/shariah-supervisory-committee.html. UAE: For residents

of the UAE – Standard Chartered Bank UAE does not provide financial analysis or consultation services in or into the UAE within the

meaning of UAE Securities and Commodities Authority Decision No. 48/r of 2008 concerning financial consultation and financial analysis.

Uganda: Our Investment products and services are distributed by Standard Chartered Bank Uganda Limited, which is licensed by the

Capital Markets Authority as an investment adviser. United Kingdom: Standard Chartered Bank (trading as Standard Chartered Private

Bank) is an authorised financial services provider (license number 45747) in terms of the South African Financial Advisory and

Intermediary Services Act, 2002. Vietnam: This document is being distributed in Vietnam by, and is attributable to, Standard Chartered

Bank (Vietnam) Limited which is mainly regulated by State Bank of Vietnam (SBV). Recipients in Vietnam should contact Standard

Chartered Bank (Vietnam) Limited for any queries regarding any content of this document. Zambia: This document is distributed by

Standard Chartered Bank Zambia Plc, a company incorporated in Zambia and registered as a commercial bank and licensed by the Bank

of Zambia under the Banking and Financial Services Act Chapter 387 of the Laws of Zambia.


Appendix.

Documents

Fixed Income Trade Notes