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

<ul>
<li>In today's Morning Views publication we comment on developments of the following high yield issuers: Road King Infrastructure, Continuum Green, Softbank Group</li>
<li>UST yields declined for a second straight day yesterday. There were no major macro catalysts, albeit the move was in line with gains across most European government bonds.</li>
<li>The UST curve bull flattened, with the yield on the 2Y UST falling 1 bp to 3.86%, while that on the 10Y UST was down 4 bps at 4.38%. Equities climbed to fresh record highs, with the S&amp;P 500 advancing 0.1% to 6,306 and the Nasdaq up 0.4% at 20,974.</li>
</ul>


In today's Morning Views publication we comment on developments of the following high yield issuers: Road King Infrastructure, Continuum Green, Softbank Group
UST yields declined for a second straight day yesterday. There were no major macro catalysts, albeit the move was in line with gains across most European government bonds.
The UST curve bull flattened, with the yield on the 2Y UST falling 1 bp to 3.86%, while that on the 10Y UST was down 4 bps at 4.38%. Equities climbed to fresh record highs, with the S&amp;P 500 advancing 0.1% to 6,306 and the Nasdaq up 0.4% at 20,974.


<ul>
<li>US Treasury yields declined 4-5 bps across the curve yesterday, on account of softer-than-expected consumer confidence data and amid Fed Chairman Jerome Powell's cautious remarks on rate cuts.</li>
<li>The yield on the 2Y UST declined 4 bps to 3.83%, while the yield on the 10Y UST fell 5 bps to 4.30%.</li>
<li>Equities rallied on easing tensions in the Middle East, with the S&amp;P 500 and Nasdaq up 1.1% and 1.4%, respectively.</li>
</ul>


US Treasury yields declined 4-5 bps across the curve yesterday, on account of softer-than-expected consumer confidence data and amid Fed Chairman Jerome Powell's cautious remarks on rate cuts.
The yield on the 2Y UST declined 4 bps to 3.83%, while the yield on the 10Y UST fell 5 bps to 4.30%.
Equities rallied on easing tensions in the Middle East, with the S&amp;P 500 and Nasdaq up 1.1% and 1.4%, respectively.


<ul>
<li>UST yields declined by 5-6 bps across the curve yesterday, as the market further firmed up expectations of a 25 bp Fed rate cut in September.</li>
<li>As of yesterday, Fed-dated OIS were pricing in a 26 bp rate cut next month and 64 bps of rate cuts for the remainder of 2025.</li>
<li>The yields on the 2Y UST and 10Y UST both declined 6 bps to 3.68% and 4.23%, respectively. </li>
</ul>


UST yields declined by 5-6 bps across the curve yesterday, as the market further firmed up expectations of a 25 bp Fed rate cut in September.
As of yesterday, Fed-dated OIS were pricing in a 26 bp rate cut next month and 64 bps of rate cuts for the remainder of 2025.
The yields on the 2Y UST and 10Y UST both declined 6 bps to 3.68% and 4.23%, respectively. 


Pan-Asia Catalysts/Events, Quiddity Advisors

David Blennerhassett

Pan-Asia Catalysts/Events

Quiddity Advisors

Event-Driven

<ul>
<li>This "rescue package" announcement late last month came as no surprise, as the alternative situation (liquidation/bankruptcy) for <a href="https://www.smartkarma.com/entities/new-world-development" target="_blank" data-smartkarma-citation="entities:7037:1" rel="noopener">New World Development (17 HK)</a>, and the ensuing optics were not great.</li>
<li>Media reports are now coming in that NWD is reportedly seeking to sell - or accelerate the sale - of its real estate projects in China. </li>
<li>That makes sense. The refinancing afforded NWD some breathing space. However, to strengthen/bolster its balance sheet, NWD needs to offload assets. Yet pinning down a "fair" valuation will take time. </li>
</ul>


This "rescue package" announcement late last month came as no surprise, as the alternative situation (liquidation/bankruptcy) for New World Development (17 HK), and the ensuing optics were not great.
Media reports are now coming in that NWD is reportedly seeking to sell - or accelerate the sale - of its real estate projects in China. 
That makes sense. The refinancing afforded NWD some breathing space. However, to strengthen/bolster its balance sheet, NWD needs to offload assets. Yet pinning down a "fair" valuation will take time. 


NWD (17 HK): The Strings Attached To Latest Debt Financing

<ul>
<li>0.052x P/B! That's <a href="https://www.smartkarma.com/entities/new-world-development" target="_blank" data-smartkarma-citation="entities:7037:1" rel="noopener">New World Development (17 HK)</a>'s current trailing  P/B ratio; roughly a quarter of the next comparable real estate peer.</li>
<li>
What's new? The latest decline followed an announcement on the 30th May that it would defer payments on its perpetual bonds.</li>
<li>NWD's 6.15% and 4.8% perpetuals fell to 23 cents and 15.5 cents on the dollar on 2nd June, suggesting the market is pricing in the possibility of a bust.</li>
</ul>


0.052x P/B! That's New World Development (17 HK)'s current trailing  P/B ratio; roughly a quarter of the next comparable real estate peer.

What's new? The latest decline followed an announcement on the 30th May that it would defer payments on its perpetual bonds.
NWD's 6.15% and 4.8% perpetuals fell to 23 cents and 15.5 cents on the dollar on 2nd June, suggesting the market is pricing in the possibility of a bust.


Hong Kong

Road King Infrastructure Limited is a property developer. The Company develops residential apartments as well as invests in and operates toll roads. Road King Infrastructure operates its businesses in the People's Republic of China.

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Road King Infrastructure (1098 HK)

Lucror Analytics - Morning Views Asia

In today's Morning Views publication we comment on developments of the following high yield issuers: Road King Infrastructure, Continuum Green,...

Lucror Analytics

Lucror Analytics - Morning Views Asia

US Treasury yields declined 4-5 bps across the curve yesterday, on account of softer-than-expected consumer confidence data and amid Fed Chairman...

Lucror Analytics

Lucror Analytics - Morning Views Asia

UST yields declined by 5-6 bps across the curve yesterday, as the market further firmed up expectations of a 25 bp Fed rate cut in September.

Lucror Analytics

NWD (17 HK): The Strings Attached To Latest Debt Financing

Landlords need to materially reduce rents to kickstart the retail/F&B sector, translating to lower yields, lower implied property valuations, and...

David Blennerhassett

NWD (17 HK): Markets Pricing In A Bust

0.05x P/B says it all. Conversely, NWD is so beaten up here, it's probably worth a punt if you think it will be rescued and/or perpetually supported.

David Blennerhassett

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