1、 PLEASE READ THE AUTHOR CERTIFICATION AND IMPORTANT DISCLOSURES ON LAST PAGE Fixed Income Credit Commentary 7 Nov 2025 Glenn Ko,CFA 高志和高志和(852)3657 6235 .hk Cyrena Ng,CPA 吳蒨瑩吳蒨瑩(852)3900 0801 .hk Yujing Zhang 張鈺婧張鈺婧(852)3900 0830 .hk CMBI Fixed Income .hk The“holistic”exchange offers targeting on pe

2、rps Further to our summary on the exchange offers on 3 Nov25,we share below more of our thoughts on the LME after numerous client discussions and discussions with the LME advisor.In brief,NWD launched holistic exchange offers for all of its 5 perps and 6 USD bonds with a total outstanding amount of

3、cUSD6.8bn to exchange into new perp with a initial coupon rate of 9%and bond due 2031 with a coupon rate of 7%.The maximum of new perp and bond to be issued will be USD1.9bn,including the cap on new perp issue at USD1.6bn.The exchange considerations include 2 cash pts for perp holders but no upfront

4、 cash for bondholders.The exchange for the perp instead of that for the bonds,in our view,is NWDs priority given the exchange for the perps at a 50%discount would have more meaningful impact on reduction of net debts and coupon payments.Taking in consideration of estimated distribution in arrears of

5、 cUSD100mn and“haircut”of 50%,the maximum amount of existing perps can be exchanged will be cUSD3.1bn,i.e.c69%of the o/s amount of existing perps.The exchange offers,if successfully goes ahead with new perp and bond issued totaled USD1.9bn,will help NWD reduce its net debts and net coupon payments b

6、y 7-7.5%and c1%,respectively on a pro-forma basis.NWDs net debts were HKD164.3bn as of Jun25 and interest payment including perp coupon was HKD9.4bn for FY25.See table 1&2 for the details of exchange offers.“Ring-fenced”cash flow offers higher certainty of coupon payments for new perp.The major ince