Report Industry Investment Rating - Not provided in the given content Core Viewpoints - Due to the escalation of US-China tensions, the Asia IG space widened 3-7bps across the board yesterday, with better selling on certain bonds and better buying on others [2] - China's export resilience strengthens its position in the trade war, leading to a revision of the 2025 export growth forecast from 3% to 4.5%, while maintaining the 2025 import growth forecast at 1.5%. The USD/RMB rate may appreciate from 7.13 to 7.1 by year-end and 7.05 by the end of 2026 [4][15][20] - China Water Affairs (CWAHK) proposes to issue a 5NC3 USD senior blue bond, with the FV of the new CWAHK 30 estimated at 6% [8] Summary by Directory Trading Desk Comments - Asia IG space widened 3-7bps due to US-China tension, with better selling on TW lifers, China TMTs, Japanese banks' bonds, and Southeast Asian names. Some bonds like FAEACO 12.814 Perp and NWDEVLs/LIFUNGs/FOSUNI 26 - 29s decreased in price. In Chinese properties, VNKRLE 27 - 29s and FTLNHD 26/FUTLAN 28 were lower, while some SOE property names had better buying. In Southeast Asia, VLLPM 27 - 29s edged up, and VEDLN 28 - 33s/GLPSPs were down. Long - end Yankee AT1s weakened in the morning and recovered slightly [2] - In the LGFV space, activities picked up with new CNH issues, and the space had a stable session with moderate two - way flows [3] - This morning, there were two - way flows on LGFV names. HAOHUAs recovered 3 - 5bps and HYUELEs recovered 5bps in Asia IG space, while NOMURA and Australian long - end Ts2 widened 2 - 3bps. CWAHK 26 had buyers and was 0.1pt higher [4] Marco News Recap - On Monday, S&P (+1.56%), Dow (+1.29%), and Nasdaq (+2.21%) were higher. The US bond market was closed for Columbus Day, and the UST yield was unchanged, with 2/5/10/30 yield at 3.52%/3.65%/4.05%/4.63% [7] Desk Analyst Comments - CWAHK proposes to issue a 5NC3 USD senior blue bond (Ba1/BB+/-), with the FV of the new CWAHK 30 at 6% considering its CWAHK 26 and peers' valuations, adjusted for rating and tenor differential. The issuance size should be capped at its remaining offshore - issuance quota of USD200mn [8] - The net proceeds will be used to repay offshore debt and finance eligible green projects. The new CWAHK 30 will have a CoC put at 101 [10] - CWAHK is a holding company operating mainly through PRC subsidiaries. The new CWAHK 30 will be guaranteed by non - PRC - incorporated subsidiary guarantors [11] - CWAHK is one of the largest water supply companies in China, focusing on water supply and sewage treatment, generating stable cash flow from exclusive concession rights in 58 districts. It serves various end - users with potential coverage of over 30mn people [12] - In FY25, CWAHK generated HKD11.7bn of revenue and HKD3.4bn of operating cash flow, with an estimated free cash flow of HKD40mn. Total debt was HKD25.6bn, and its operating performance weakened, with revenue and EBIT down c9%. Coverage ratios also weakened [13] - CWAHK is listed in Hong Kong, with the chairman and founder owning 27.4%, ORIX Corp and affiliates holding 27.2%, and Great Wall Life Insurance holding 6.0% [14] China Economy - China's export growth beat expectations as exports to Africa, Latin America, and the EU picked up. Exports of integrated circuits and ships remained robust, while personal consumption goods were subdued. Imports rebounded across the board, especially in processing trade. China's rare earth export control is a countermeasure to US semiconductor export restrictions. Trade tensions may intensify in the next two weeks before potentially easing after a possible Trump - Xi meeting [15] - Exports rebounded in September, reaching 8.3% YoY from 4.4% in August, beating market expectations. Exports to the US remained in deep contraction, while shipments to Africa, the EU, and Latin America accelerated. Exports to ASEAN moderated. Since the tariff shocks, exports to ASEAN and Africa have increased significantly, making up for over 120% of the export losses to the US since April. Trade surplus narrowed to US$91bn in September [16] - Integrated circuits and ships had strong growth in September, while personal consumption goods moderated. Low - value - added exports and housing - related products were hit by tariffs. Rare earth exports rebounded despite additional export controls [17] - China's imports increased to 7.4% in September from 1.3% in August, beating market expectations. Imports from the US steadied at - 16%. Import value of processing trade accelerated. For energy products, crude oil import volume rose, while coal and natural gas dropped. Raw material imports had mixed results, and crop imports picked up [18] Offshore Asia New Issues - No offshore Asia new issues were priced today [22] - There are several issuers in the pipeline, including the Macau Branch of Bank of China Limited, Jinan Hi - tech International, and KEB Hana Bank, with different tenors, coupons, and issue ratings [23] News and Market Color - Yesterday, 118 credit bonds were issued onshore with an amount of RMB138bn. Month - to - date, 191 credit bonds were issued with a total amount of RMB212bn, a 19.7% yoy increase [24] - Indonesia plans to shorten the permit process for geothermal projects to three months [24] - Country Garden's top shareholder agrees to a USD1.14bn debt - to - equity swap and will hold scheme meetings on 5 Nov'25 for creditors to vote on its offshore restructuring plan [24] - Freeport Indonesia halts the Gresik smelter due to a mine landslide [24] - China Energy Overseas will redeem GEZHOU 4.15 Perp of USD200mn on 25 Nov'25 [24] - LG Electronics expects a 8.4% yoy drop in 3Q25 operating profit due to higher tariffs [24]