Bondcritic Limited - HNA Group: TRICK or TREAT

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Bondcritic Limited

Warut Promboon

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HNA Group: TRICK or TREAT

HNA’s SANYPH 11/18s will mature on November 6 (next Tuesday) and we believe there is a likelihood that HNA will repay the bonds, based on the group’s credit facilities, on-going asset sales, and additional new debt the group has raised so far since July.

We note that it will be difficult to buy SANYPH 11/18s since the maturity date is already next week. Our liquidity analysis puts more confidence in HNA’s cashflow until the end of June 2019 and we revise our recommendation on SANYPH 11/18s, SANYPH 12/18s, and HONAIR 1/19s to a tactical OVERWEIGHT (from Underweight). We are less confident in GRCHAR 3/19s as the bonds do not represent HNA’s reputation as much, in our view.

Over the longer term, we do not believe that the group's financial situation is sustainable. The group’s liquidity situation remains tight and deteriorating reputation (from negative headlines) has hit the group’s profitability. As such, we maintain our UNDERWEIGHT recommendation on GRCHAR 3/19s, SANYPH 8/19s, SANYPH 10/20s, and HONAIR Perp.

30/10/2018 8 EN

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Bondcritic Limited

Bondcritic, established in 2009, is designed to be an independent credit research voice that helps investors gain insights and unbiased analyses on Asian fixed income market. Our mission is to discover selected deep-value Asian high-yield and distressed bonds with a bottom-up approach, together with the help of our proprietary ESG (Environmental, Social Development, and Governance) model.

Our public research periodicals include:
- Asian Credit Monitor and Asian Dollar Bond Monitor: Asian bond strategy and commentaries and Industry outlook
- Asian Frontier Monitor: Pre-IPO research on Asian frontier markets such as Myanmar, Cambodia, Sri Lanka, Laos, Mongolia, and Vietnam.
- Asian ESG Monitor: Environmental, Social development, and Governance research
- Asian credit flash: A flash note on individual bonds and/or current credit news
Consulting services
- Private credit research
- Asian credit portfolio construction and monitoring/reviews
- Private debt and alternative financing solution consultation
Corporate bond fact sheets
A fintech platform to decentralize credit research and empower credit analysts.

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Warut Promboon

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HNA Group: TRICK or TREAT

Our public research periodicals include:

Asian Credit Monitor and Asian Dollar Bond Monitor: Asian bond strategy​ and commentaries and Industry outlook

Asian Frontier Monitor: Pre-IPO research on Asian frontier markets such as Myanmar, Cambodia, Sri Lanka, Laos, Mongolia, and Vietnam.

Asian ESG Monitor: Environmental, Social development, and Governance research

Asian credit flash: A flash note on individual bonds and/or current credit news

Consulting services

Private credit research

Asian credit portfolio construction and monitoring/reviews

Private debt and alternative financing solution consultation

Corporate bond fact sheets

A fintech platform to decentralize credit research and empower credit analysts.

Energy Absolute: Absolutely Negative Energy

SPV77 / Siri Hub Investment Digital Token: Thailand’s First Debt Token

Social Bonds: Here Come the Next Green Bonds

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Asian Credit Monitor and Asian Dollar Bond Monitor: Asian bond strategy and commentaries and Industry outlook