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Our Top Picks

We highlight below some of the bonds we currently prefer, based on the value they offer and the strength of their credit. Research from CreditSights, our third-party provider and one of the best credit research firms in the world, helped us come up with these picks.
by Metrobank
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Issuer: Republic of the Philippines
Credit Rating: Baa2 / BBB+ / BBB
Bond: ROP 5.609% 33
Indicative Price: 98.125
Indicative Yield-to-Maturity (YTM): 5.851% (as of October 24, 2022)

Issuer: Kingdom of Saudi Arabia
Credit Rating: A1 / A- / A
Bond: KSA 32New
Indicative Price: 98.250
Indicative Yield-to-Maturity (YTM): 5.732% (as of October 24, 2022)

  • The new 10-year KSA (Kingdom of Saudi Arabia) and ROP (Republic of the Philippines) US dollar bonds were issued with generous premiums over the secondary market.
  • Historically, INDONs (Indonesia) yield 20 basis points (bps) higher than ROPs, but the new ROPs now offer the same yield as INDONs of the same tenor. We therefore see better value in ROPs, particularly in ROP 33 versus the INDON 32New with a similar tenor. Meanwhile, KSA 32New is yielding just 10 bps less than ROP 33 despite being A-rated.

(Call your relationship manager or investment specialist to pursue this opportunity.)

Issuer: Hyundai Capital America
Bond: HYNMTR 1 24
Indicative Price: 91.125
Indicative Yield-to-Maturity (YTM): 6.042% (as of October 24, 2022)

  • Hyundai Motor Group, the issuer’s parent company, grew its market share, excluding China, to 11% in 2021 vs 8% in 2010. Its US market share also grew from 7.5% in 2016 to 10% in 2021.
  • This despite a global shortage in chips used in cars. The rosy results can be attributed to optimized net pricing, a shift toward SUVs, and favorable foreign exchange rates.
  • We also like that its credit rating is aligned with Hyundai Motor due to existing support agreements that have no expiry date.
  • Despite estimates of an overall industry decline, Hyundai Motor America reported a 14% year-on-year increase in sales in August 2022 amid a rebound in inventory, driven by high demand for SUVs and eco-friendly vehicles.

Issuer: Reliance Industries Ltd.
Bond: RILIN 4.125 25
Indicative Price: 96.625
Indicative Yield-to-Maturity (YTM): 5.740% (as of October 24, 2022)

  • Reliance Industries Ltd. (RIL) is India’s largest company by revenues, profits and exports. It dominates the country’s key sectors, such as crude oil refining, petrochemicals, telecom and retail.
  • It has strengthened its balance sheet considerably, with the help of a flurry of global investments into its retail and telecom businesses.
  • RIL’s diversified operations across the consumer business continue to help it wade through the COVID-19 economic downturn and keep its earnings buoyant.

Issuer: Development Bank of the Philippines
Bond: DEVPHI 2.375 31
Indicative Price: 83.00
Indicative Yield-to-Maturity (YTM): 4.95%

  • With signs that inflation is abating globally, lower rates may be on the horizon. However, central banks are still planning hikes in 2023 and we think banks are well poised to benefit from rising short-term rates.
  • DEVPHI 31, in particular, looks cheap as it has a 70-basis-point premium over ROP 31New.
  • In comparison, BDO Unibank (BDO) and Bank of the Philippine Islands (BPI) bonds trade 40-60 basis points over ROPs despite not being government owned like DBP.

(Get in touch with your investment specialist or relationship manager to facilitate the transaction. You may also log in to your Wealth Manager account.)

Click here for other bond issuers we have covered.