Senior Credit Analyst, Lucror Analytics

Leonard Law, CFA

Senior Credit Analyst

High Yield Experts

Lucror Analytics

Lucror Analytics is a leading credit and ESG research specialist and a provider of technology solutions for differentiated fixed income strategies. Our roots are in bottom-up fundamental credit analysis with a specialization in high yield corporate credits from Europe, Asia and Latin America. We are one of few research specialists integrating ESG considerations with fundamental credit research through a dedicated ESG platform. Our ESG assessment covers five key criteria: Disclosure, E,S, & G Pillars, Controversies, ESG Impact on Credit and ESG Momentum.

Recognizing the importance and value-add of Factor Investing in fixed income, Lucror developed the Smart Quant Navigator (SQN), an intuitive platform that helps clients devise and implement factor-based strategies ranging from pure quant to active fundamental, with integrated ESG.

Our company has been at the forefront of developments in the fixed income markets, identifying opportunities and consistently delivering new products and value-adding solutions to clients. Lucror has close relationships with the largest and most reputable asset managers, family offices, hedge funds, investment and wealth managers globally.

Credit

In this month’s “In-Focus” section, we provide an update to our 2018 analysis of returns and volatility for unrated Chinese issuers. Since our first report, the number of such issuers has increased notably. At the same time, with the Lucror Chinese Industrial index having run since 1 January 2018, we can now better compare the unrated issuers' performance relative to peers. The Asia Monthly focuses on providing updates on recent events, information on new issues and spread movements, as well as summarising our top picks, and discussing specific areas of interest in the “In-Focus” section. The Asia Monthly is intended to broaden investors' understanding of the Asian USD high-yield market.

  In this month’s “In-Focus” section, we provide an update to our 2018 analysis of returns and volatility for unrated Chinese issuers. Since our first report, the number of such issuers has increased notably. At the same time, with the Lucror Chinese Industrial index having run since 1 January 2018, we can now better compare the unrated issuers' performance relative to peers.   The Asia Monthly focuses on providing updates on recent events, information on new issues and spread movements, as well as summarising our top picks, and discussing specific areas of interest in the “In-Focus” section. The Asia Monthly is intended to broaden investors' understanding of the Asian USD high-yield market.  

Asia HY Monthly - Returns And Volatility For Unrated Chinese Issuers (2020) - Lucror Analytics

The Asia HY Trade Book for the month of October includes a summary of our recommendations, as well as our high-conviction ideas. The report also features relative value charts and lists of the bonds in the Lucror Asia HY index.

  The Asia HY Trade Book for the month of October includes a summary of our recommendations, as well as our high-conviction ideas. The report also features relative value charts and lists of the bonds in the Lucror Asia HY index. 

Asia HY Trade Book - October 2020 - Lucror Analytics

In this month’s “In-Focus” section, we consider China’s new Three Red Lines leverage guidelines for developers, which have been rolled out on a limited basis. We also look at the context for the policy’s introduction and its implications on credit access for industry players at large.  The Asia Monthly focuses on providing updates on recent events, information on new issues and spread movements, as well as summarising our top picks, and discussing specific areas of interest in the “In-Focus” section. The Asia Monthly is intended to broaden investors' understanding of the Asian USD high-yield market.

  In this month’s “In-Focus” section, we consider China’s new Three Red Lines leverage guidelines for developers, which have been rolled out on a limited basis. We also look at the context for the policy’s introduction and its implications on credit access for industry players at large.    The Asia Monthly focuses on providing updates on recent events, information on new issues and spread movements, as well as summarising our top picks, and discussing specific areas of interest in the “In-Focus” section. The Asia Monthly is intended to broaden investors' understanding of the Asian USD high-yield market.  

Asia HY Monthly - China's Three Red Lines - Lucror Analytics

The Asia HY Trade Book for the month of September includes a summary of our recommendations, as well as our high-conviction ideas. The report also features relative-value charts and lists of the bonds in the Lucror Asia HY index.

  The Asia HY Trade Book for the month of September includes a summary of our recommendations, as well as our high-conviction ideas. The report also features relative-value charts and lists of the bonds in the Lucror Asia HY index. 

Asia HY Trade Book - September 2020 - Lucror Analytics

Pan-Asia Catalysts/Events, Quiddity Advisors

David Blennerhassett

Pan-Asia Catalysts/Events

Quiddity Advisors

Event-Driven

<div>
Back on the 2 April, China's <a href="https://www.smartkarma.com/entities/58-com-inc-adr" target="_blank" data-smartkarma-citation="entities:2563:1" rel="noopener">58.Com Inc (WUBA US)</a> received a preliminary, nonbinding <a href="https://sec.report/Document/0001104659-20-042699/" target="_blank" rel="noopener">proposal</a> from Ocean Link Partners, at $27.50 per Class A or Class B ordinary share, or $55/ADS, a 17.88% premium to last close. This was followed on the 20 April with 58.com <a href="http://app.quotemedia.com/data/downloadFiling?webmasterId=101533&amp;ref=114974426&amp;type=PDF&amp;symbol=WUBA&amp;companyName=58.com+Inc.+American+Depositary+Shares+each+representing+2+Class+A&amp;formType=6-K&amp;dateFiled=2020-04-30&amp;CK=1525494" target="_blank" rel="noopener">announcing</a> it had received a preliminary &amp; non-binding Offer from the Buyer Group, comprising Ocean Link Partners and Warburg Pincus Asia LLC, General Atlantic Singapore Fund, and Jinbo Yao, 58.com's chairman and chief executive officer. The indicative Offer Price remained at $55/ADS. A definitive Agreement and Plan of Merger was <a href="http://58.investorroom.com/2020-06-15-58-com-Enters-into-a-Definitive-Agreement-for-Going-Private-Transaction" target="_blank" rel="noopener">announced</a> on the 15 June, with the consideration price marginally sweetened to $56/ADS, a 19.9% premium to the undisturbed price.
Under the merger agreement, the Buyer Group has formed a new holding entity, Quantum Bloom Group Ltd (Parent).
Yao entered into a support agreement with the Parent such that Yao will roll over his stake in 58.com (42% of the voting power) into newly-issued shares of Parent. General Atlantic <a href="http://app.quotemedia.com/data/downloadFiling?webmasterId=101533&amp;ref=115087118&amp;type=PDF&amp;symbol=WUBA&amp;companyName=58.com+Inc.+American+Depositary+Shares+each+representing+2+Class+A&amp;formType=SC+13D%2FA&amp;dateFiled=2020-06-22&amp;CK=1525494" target="_blank" rel="noopener">elected</a> on June 21, 2020 not to roll over its stake (2% of the voting power), electing its shares be cancelled in exchange for the merger consideration. That bumped the financing for the merger by US$400.4mn.
Additionally, <a href="https://www.smartkarma.com/entities/tencent-holdings-ltd" target="_blank" data-smartkarma-citation="entities:26:1" rel="noopener">Tencent Holdings (700 HK)</a> entered into a rollover agreement with the parent on the <a href="http://app.quotemedia.com/data/downloadFiling?webmasterId=101533&amp;ref=115079126&amp;type=PDF&amp;symbol=WUBA&amp;companyName=58.com+Inc.+American+Depositary+Shares+each+representing+2+Class+A&amp;formType=SC+13D%2FA&amp;dateFiled=2020-06-17&amp;CK=1525494" target="_blank" rel="noopener">15 June</a>, such that Tencent will roll over its existing stake (28.3% of the voting power) into newly-issued ordinary shares of Parent.
The Merger requires the affirmative vote of two-thirds of 58.com's total voting power (present and via proxy) at an EGM. This will be held on the 7 September - this coming Monday. Yao and General Atlantic will vote their collective 44.02% voting power in favour of the merger. Tencent is not obligated to vote in a specific way under its rollover Agreement. But assuming Tencent does, its 28.3% voting power takes the total to 72.3% - exceeding the two-thirds threshold.
The low-ball offer was not lost on investors. Lawyers Halper Sadeh set up a site for assist investors to "obtain the best possible consideration".
This was followed by proxy advisors reports from both Glass Lewis and ISS recommending shareholder vote AGAINST the proposal. 
But this is a done deal. The alternative avenue is the long-dated appraisal rights route.
</div>
<div>
As always, more below the fold.
</div>


Back on the 2 April, China's 58.Com Inc (WUBA US) received a preliminary, nonbinding proposal from Ocean Link Partners, at $27.50 per Class A or Class B ordinary share, or $55/ADS, a 17.88% premium to last close. This was followed on the 20 April with 58.com announcing it had received a preliminary &amp; non-binding Offer from the Buyer Group, comprising Ocean Link Partners and Warburg Pincus Asia LLC, General Atlantic Singapore Fund, and Jinbo Yao, 58.com's chairman and chief executive officer. The indicative Offer Price remained at $55/ADS. A definitive Agreement and Plan of Merger was announced on the 15 June, with the consideration price marginally sweetened to $56/ADS, a 19.9% premium to the undisturbed price.
Under the merger agreement, the Buyer Group has formed a new holding entity, Quantum Bloom Group Ltd (Parent).
Yao entered into a support agreement with the Parent such that Yao will roll over his stake in 58.com (42% of the voting power) into newly-issued shares of Parent. General Atlantic elected on June 21, 2020 not to roll over its stake (2% of the voting power), electing its shares be cancelled in exchange for the merger consideration. That bumped the financing for the merger by US$400.4mn.
Additionally, Tencent Holdings (700 HK) entered into a rollover agreement with the parent on the 15 June, such that Tencent will roll over its existing stake (28.3% of the voting power) into newly-issued ordinary shares of Parent.
The Merger requires the affirmative vote of two-thirds of 58.com's total voting power (present and via proxy) at an EGM. This will be held on the 7 September - this coming Monday. Yao and General Atlantic will vote their collective 44.02% voting power in favour of the merger. Tencent is not obligated to vote in a specific way under its rollover Agreement. But assuming Tencent does, its 28.3% voting power takes the total to 72.3% - exceeding the two-thirds threshold.
The low-ball offer was not lost on investors. Lawyers Halper Sadeh set up a site for assist investors to "obtain the best possible consideration".
This was followed by proxy advisors reports from both Glass Lewis and ISS recommending shareholder vote AGAINST the proposal. 
But this is a done deal. The alternative avenue is the long-dated appraisal rights route.


As always, more below the fold.


58.com: Foregone Conclusion Amidst Proxy Advisor Pushback

China

eHi Car Services Ltd provides car rental services. The Company works with retail and corporate clients.

Price Gauge
52-week Range	0.00 - 0.00
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Dividend (Yield)	0.00

eHi Car Services Ltd (EHIC US)

Asia HY Monthly - Returns And Volatility For Unrated Chinese Issuers (2020) - Lucror Analytics

In this month’s “In-Focus” section, we provide an update to our 2018 analysis of returns and volatility for unrated Chinese issuers. Since our...

Lucror Analytics

Asia HY Trade Book - October 2020 - Lucror Analytics

The Asia HY Trade Book for the month of October includes a summary of our recommendations, as well as our high-conviction ideas. The report also...

Lucror Analytics

Asia HY Monthly - China's Three Red Lines - Lucror Analytics

In this month’s “In-Focus” section, we consider China’s new Three Red Lines leverage guidelines for developers, which have been rolled out on a...

Lucror Analytics

Asia HY Trade Book - September 2020 - Lucror Analytics

The Asia HY Trade Book for the month of September includes a summary of our recommendations, as well as our high-conviction ideas. The report...

Lucror Analytics

58.com: Foregone Conclusion Amidst Proxy Advisor Pushback

On the 2 April, China's 58.Com Inc (WUBA US) received a preliminary, nonbinding proposal from Ocean Link Partners, at $27.50 per Class A or Class...

David Blennerhassett

Price Gauge

52-week Range

Market Cap (USDm)

P/E

Dividend (Yield)