CONFIDENTIAL

Introduction to
International Bond Markets
December 2020

Strictly Confidential
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Table of Contents

1. Equity or Debt
2. USD Bond Considerations
3. Execution Process and Documentation Overview
4. Investor Engagement Strategy
5. Pricing Methodology and Investor Mix
6. Case Studies
Appendix : Market Update

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1. Equity or Debt

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Equity and Debt Markets

The below highlights the difference between investment approaches followed be Equity versus Debt investors
Rule No. 1: Never lose money. Rule No. 2: Never forget rule No.1

 Corporate Finance has always alluded to an optimum capital structure for maximizing value. Optimum capital structure is derived from sustainable
debt and equity. Optimization of debt is industry specific and critically important for sectors for generating meaningful ret urn for the stakeholders

Emerging Market Investing

Equity Debt

 Global equity investors usually invest in Emerging Markets for generating  Global Debt investors invest in Emerging Market debt for additional yield or
additional alpha rate pick up

 Equity investors look for cushion specifically considering anticipated  Global Debt prefer investing in foreign currency and recommend investee
exchange rate movement companies to adapt requisite hedging strategies

 Preference at times towards growth vis a vis stable cash flows (owing to  Preference remains towards stable cash flow generating companies with
risk considerations) predictable volatility specifically for Investment Grade names

Emerging Market Investment Philosophy: PIMCO

Emerging Market Investment Philosophy: Morgan Stanley
 Countries with strong or improving underlying fundamentals, attractive
 Both country-level and stock-specific factors can drive risks and returns in
valuations, and potential return catalysts
emerging markets (Politics, Demographics and Sentiment for countries)
 PIMCO’s top-down macroeconomic forecasts with individual country
 Seeks to add value by integrating top-down country allocation and bottom-
assessments to gauge risks
up stock selection with a growth bias
 Complement fundamental analysis with a rigorous security selection
 Evaluation of three companies Government Controlled, Cyclical and Private
process to both ensure consistency between views and portfolio positioning
Sector. Portfolio comprised of Private Sector of underappreciated growth
and take advantage of relative value opportunities across and within
and quality management with a string track record
markets

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2. USD Bond Considerations

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USD Bond Offers a Number of Appealing Features

USD bond market is a significant source of funding for many sovereigns, corporates and financial institutions throughout the
world

Benefits of Bond Financing

 After a debut issuance, the Issuer will

have the ability to quickly tap the bond
 No quarterly testing of financial
markets for future financing needs No maintenance
Ability to “tap” – based financial covenants unlike loans
quickly covenants

 Offers the deepest pool of liquidity

globally Access deep, No
liquid amortization
 Hard currency match for future international  Bullet repayment unlike amortizing
acquisitions bond markets term loans

 Maintain bank lines for opportunistic

corporate actions, or as liquidity
Diversify Free up senior standby
 Increases capital raising channels by investor base secured debt
accessing a new investor base capacity

Matching long-
term assets with Longer tenor
 Matches long term asset purchase with long-term debt  Longer average life of 10 years
long term financing liabilities compared to bank loans

 Reduces refinancing risk

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USD Bond Versus Bank Loan Financing

USD Bond Syndicated Loans

✓ Market depth and liquidity allows for significant initial issue size: USD
Issue Size
200 million minimum size for a standalone issue
✓ Flexible, depending on the company’s credit

 Typically amortising
Structure ✓ Bullet maturity
✓ Prepayable at par at the end of an interest period

Security ✓ Typically unsecured (with negative pledge)  Typically will have a comprehensive security package

 Generally a higher absolute cost of funding, given the greater issuer ✓ Typically the lowest absolute cost of funding, given better lender
Pricing & Coupon Type flexibility protection and “relationship subsidy”
✓ Fixed rate  Typically priced on a floating rated spread off LIBOR

✓ Longer tenor of 5-10 years achievable; Can go up to 30 years for

Tenor  Generally limited to a maximum tenor of 5 years
names like EXIM

✓ Provides the greatest diversification via a global investor base including

 Syndicated loans are typically restricted to a limited number of
Investor Diversification institutional investors (asset managers, insurance and pension funds,
relationship banks (in Asia)
hedge funds) and private bank clients

✓ SG / HK / LDN
Roadshow ✓ No roadshow necessary
✓ Additional stops in NY / Boston / LA for 144a deals

Credit Rating
 Minimum of 2 international ratings required ✓ No ratings required
Requirement

 Quarterly  Monthly
Ongoing disclosure
 Public disclosure  Private-side disclosure only

✓ Establishes a liquid funding benchmark

✓ Provides diversity of funding sources – frees up bank lines for other
Other Considerations ✓ More rapid execution
uses
 Requires more intensive marketing effort

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Key Considerations for an Issuer

Particulars

1  USD is the most common currency of choice for the majority of Asian issuers as it offers the most liquid market and access to
the broadest investor base globally
Currency
 However, many issuers have been looking at other niche local currencies for issuance of smaller amounts – these currencies
when swapped into USD may offer attractive pricing

2
 A size of USD200 million or above will ensure that there is sufficient liquidity in the secondary USD markets
Size
 For alternate currencies, lower benchmark sizes can also be considered

3
 The deepest investor pool typically exists for 5 year tenors and hence it is the preferred tenor for debut and repeat issuers
Tenor  Other tenors typically tapped include 3, 7 and 10 years; can go up to 30 years for select names

4  A Reg S only format is typically used for deal sizes below USD500 million. For USD500 million or more, the Issuer can follow a
144A/Reg S format
Format
 However, in order to tap the US investor base, issuers may seek to access a 144A/Reg S market for modest sizes as well

5  Ratings from two international rating agencies are typically required for any issuer who wishes to access the international bond
Ratings & markets
Documentation  Key international ratings include Standard & Poor (“S&P”), Moody’s and Fitch.

6  A roadshow assists the management in articulating the credit story of the Issuer to the investment community

Roadshow  In a Reg S only offering, key locations are Singapore, Hong Kong and London, whereas in a 144A/Reg S offering, New York,
Boston and LA may be targeted for meeting investors

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Standalone vs. MTN Program

Regular Issuer opt for establishment of MTN Program, which creates a platform for multiple future issuances. The key
benefits of an MTN Program are listed below:

 Issue size (draw down amount can be as small as USD5mm equivalent)

 Tenor (up to 10 years or more)
Maximum  Currency (USD, Euro, or any other local currencies)
Flexibility  Structure (can issue fixed rate, floating rate, zero coupon etc.)
 Multiple bond issues can be executed off the same MTN Program
 Documentation could be customized allowing flexibility for subsidiaries to raise funds

Shortened  A set of master documents is created, which may be updated on a yearly basis
Execution  This increases speed to market
Time  Facilitates taking advantage of favorable market conditions as and when they arise

 Future legal fees are less with the completion of the master document as documents are pre-agreed
 Scarcity value driven by small issue amounts reduce cost of borrowing
Reduced Cost
 Shortened transaction execution time facilitate tapping the market at favorable times, thereby reducing the average cost of funding over
time

 Ability to access regional bond markets through placements of local currency or USD bonds directly into the market (e.g. Singapore,
Diversify Hong Kong, Dim Sum market etc), tapping a diverse investor base
Funding Base  Deals can be done on a reverse enquiry basis
 Private placement transactions can be done even with the single investor

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Considerations for a Reg S vs. 144A/Reg S Format

Regulation S Offering Rule 144A/Regulation S Offering

Size  US$ 200mm or more (one tranche)  US$500mm or more (one tranche)
Liquidity  Lower than that available in 144A format  Greater liquidity
Tenors  Typically maximum tenor of 10 years  Typically maximum tenor of 30 years
 Asian and European Institutional Investors & US  US Qualified Institutional Buyers (QIBs); Asian and European Institutional Investors
Investors
offshore accounts – broader distribution
Listing Venue or  Generally listed on local and/or international exchanges,  U.S. QIBs will accept an international listing such as London, Luxembourg, Hong
Exchange such as Singapore, London, Luxembourg or Hong Kong Kong or Singapore

Initial Disclosure  Likely greater focus on documentary due diligence

 Limited documentary due diligence is required
Level and Due  Greater legal counsel focus on disclosure (e.g. additional risk factors, Management
 Lesser focus on disclosure as compared to 144A format
Diligence Discussion & Analysis (MD&A) and possibly expanded business description)

 Accounting differences between domestic GAAP and IAS (or US GAAP)

 Accounting differences between domestic GAAP and
Financial  No GAAP reconciliation
IFRS
Disclosure  MD&A included
 No GAAP reconciliation
 Rule 10b-5 Negative Assurance Letter

Ongoing
 As required by the relevant stock exchange (generally
disclosure  As per Reg S offering
annual reports, interim statements and material events)
requirements
 Typically limited to legal opinions from one local and
 Market practice generally requires from two local and two international counsels
Legal Opinions one international counsel as to enforceability of legal
 10b-5 letters providing negative assurance as to the disclosure
documents, and Issuer’s capacity and authority to issue
Auditor’s Comfort
 ICMA Standard comfort letter  SAS 72 and SAS 72 “lookalike” comfort letters
Letters

 No “general solicitation or general advertising” of/to investors in the U.S.

Restrictions on  Although the two standards are similar, participants adhere much more strictly to
 No “directed selling efforts” into the U.S.
Publicity restrictions regarding publicity activities into the U.S., including prohibiting any
publicity activities such as distribution of research reports to U.S. offerees

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3. Execution Process and Documentation

Overview

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Execution Process
The bond execution process is comprised of multiple different workstreams which are managed in parallel to ensure the
fastest, most efficient, time to market

Overall Deal Management

Offering Structuring /
Due Diligence Rating Roadshow Sales / Distribution
Memorandum Documentation

Agency Pre Deal

Legal Issuer Disclosure Structuring Presentation
Discussion Research

Pricing /
Commercial Risk Factors Transaction Docs Logistics
Allocation

Financial Industry Section Investor Q&A Closing

 Preparation of DD  Address rating agency  Three year historical  Preparation of  Preparation of  Target key accounts
questionnaire questions on operations' financials and interims transaction docs; Pricing Roadshow Presentation
 Maximize distribution to
and guarantee (inc. discussion and Supplement;
 1-2 day calls / meetings  Organization of widest possible account
documents analysis) Subscription Agreement
with senior management roadshow logistics and drive tight pricing
etc
 Audit process & timing (investor invites / flights
 Facilitates effective OM
/ hotels etc)
drafting  Comfort letters
 Investor Q&A prepared
 Legal DD material
to aid the company in
provided by legal
answering potential
counsel
investor questions

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Roles & Responsibilities – Key Third Parties

 Appoints principal parties (Lead Manager, legal counsel, trustee/fiscal agent, auditors and printers). 144A/ Reg S issuances require two domestic
and two international counsels. In case Issuers have MTN Programme, same legal counsels will work on drawdown documentation as well
Issuer
 Provides required disclosure information and other inputs for the Offering Circular (“OC”) and due diligence
 Provides Board resolutions to authorize the issue and provision of other conditions precedent documents

 Overall process and timeline coordination

 Negotiates and reviews the terms and conditions of the Notes and the other documentation
 Assists the Issuer with ratings process
Lead Manager &
 Coordinates roadshow logistics, prepares investor Q&A and roadshow presentation
Bookrunner (SCB)
 Liaises with legal counsel on due diligence, documentation and the listing process
 Provides market updates to the Issuer
 Pricing, settlement and closing

 Primary responsibility for drafting the OC

 Liaises with Issuer’s auditors and Domestic legal counsel with respect to comfort letter and legal opinions
 Conducts documentary diligence
International Legal
Counsel – Issuer  Prepares and negotiates the relevant legal documentation (key documents include the terms and conditions of the Bonds, the subscription
agreement, and the trust deed / fiscal agency agreement) on behalf of the Issuer
 Delivers legal opinion relating to the relevant legal documentation
 Advises as to compliance with English securities laws generally

 Liaises with Issuer’s auditors and Domestic legal counsel with respect to comfort letter and legal opinions

International Legal  Assists the Lead Manager in conducting due diligence in relation to Issuer
Counsel – Lead Manager  Prepares and negotiates the relevant legal documentation (key documents include the terms and conditions of the Bonds, the subscription
& Bookrunner agreement, and the trust deed / fiscal agency agreement) on behalf of the Lead Manager
 Coordinates the listing of the Bonds with the Listing Agent, and Signing and Closing
 Delivers legal opinion relating to the relevant legal documentation

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Roles & Responsibilities – Key Third Parties (cont’d..)

Domestic Legal Counsel  Assists with the local regulatory applications and delivers domestic law legal opinion
– Issuer  Drafts documentation with respect to domestic law

Domestic Legal Counsel  Assists the Lead Manager in conducting due diligence in relation to the Issuer
– Lead Manager &
Bookrunner  Delivers domestic law legal opinion

 Can either have a Trustee or a Fiscal Agent; also acts as Registrar and Common Depository
 Reviews Offering Circular, Trust Deed / Fiscal Agency Agreement and all supporting documents
 Initial establishment of the account & attendance at the Common Depositary pre-closing and closing

Trustee & Paying Agent /  Establishment and maintenance of Noteholder register and tranche accounts as applicable
Listing Agent  Payment of annual, semi-annual or quarterly interest and principal
 Responding to Bondholder’s enquiries
 Maintenance of Bonds on behalf of the Clearing Systems
 Liaises with relevant Stock Exchange for listing of Bonds, includes submission of listing application along with OC

 The Issuer’s existing auditor who verifies financial information included in the OC, and provides comfort letter as to changes since the last audited or
reviewed accounts
Auditor
 Provides comfort letter after pricing (when the subscription agreement is signed)
 Also provides bring down comfort letter upon issuance of the Bonds (i.e. Settlement)

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Key Documents
 The Offering Circular (also called a prospectus) is a legal document offering securities for sale and is used to market the credit and transaction to investors
 Also designed to ensure potential investors have a full and proper understanding of the Issuer’s business, financial condition, prospects and risks
 Should contain all information that is material to an investor’s decision to purchase the Bonds
 Typically follows the following format:
 Summaries of the Issuer (& Guarantor if applicable), Financials and terms of the Offering
 Risk Factors (risks specific to Issuer’s business, the industry, the country and also the Bonds)
 Use of Proceeds
 Capitalization table
Offering  Illustration of Issuer’s group structure
Circular  Description of the Issuer’s business
 Industry Overview
 Relationship with the Government
 Terms & Conditions of the Bonds
 Management Discussion and Analysis (three full year financial performance)
 Taxation
 Selling Restrictions
 General Information
 Financial statements and auditor’s reports
 If there is an MTN Programme OC already in place, Issuer’s can access markets on the basis of Pricing Supplement and Note OC (if required)

 An agreement between the Issuer and the Lead Manager relating to the subscription of the issue. It documents the following:
 Issuer’s agreement to issue Bonds and complete the required documentation
 Agreement by the Lead Manager in respect of subscription
 Stabilization of the Bonds post issuance
Purchase  Listing of the Bonds
Agreement  Representations & Warranties as well as Undertakings and an indemnity from the Issuer to the Lead Managers
 Conditions Precedent
 Lead Managers’ fees and expenses
 Termination events
 Governing Law & Selling Restrictions

 These are letters from the Issuer’s auditors addressed to the Lead Manager dated on each of the signing and closing dates addressing the following points
 Confirmation of accurate extraction or calculation of financial information in the Offering Circular
Comfort  Confirmation of no adverse change in certain financial line items since the date of the most recent financial statements – this is called “negative assurance”
Letters
 For 144A / Reg S transactions, SAS 72 compliant comfort letter will be delivered
 Auditors may need to undertake a limited review of financials if the issue date of the Bonds will be more than 135 days after the date of the last audited financials

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Key Documents (Cont’d)

 An issuance in 144A / Reg S format will require extensive documentary due diligence by counsels. Documentary diligence could include board minutes, financing
arrangement, shareholder agreement, litigation, auditor correspondences, key contractual documentation
Due  Apart from Documentary due diligence, Due diligence is conducted by the Lead Manager throughout the transaction, in particular at the start of the transaction
Diligence and prior to the launch and closing of the transaction
 It is customary to obtain the participation in the diligence process of senior ranking officials of the Issuer (and any guarantor). These officials will answer a pre-
prepared due diligence questionnaire. These answers will help determine the accuracy and completeness of the disclosure in the OC
 This is a contract between the party acting as Trustee for bondholders and the Issuer. The Trust Deed:
 Constitutes the bonds and incorporates the terms and conditions (e.g. maturities, interest rates and redemption rights) for the Notes
 Sets forth the security for the bonds (if any)
Trust Deed
 Provides procedures for amending the Trust Deed
 Provides for the Trustee’s duties and rights
 Sets out the Events of Default in conjunction with the terms and conditions
 All the counsels involved in the transaction furnish legal opinion. For 144 A / Reg S issuance counsel deliver 10b-5 legal opinion on basis of enhanced diligence
including documentary diligence. These are given to the Lead Manager by the legal counsel to address the following:
 Incorporation of Issuer
 Issuer not subject to insolvency proceedings
 Documents duly authorized, executed and delivered
Legal  Enforceability of obligations
Opinions  Obtained or completed required authorization, approvals, consents, filings and registrations
 Accuracy of taxation disclosure
 Limits on distribution of offering documentation
 Legality of stabilization activity
 Extent of due diligence
 Effectiveness of choice of law provisions and any other relevant legal matters
 Pricing Supplement
 Global Note Certificate
Other
 Fiscal Agency Agreement (if no Trustee & Trust Deed) - this is an agreement that governs the agent’s responsibility to pay principal and interest to bond holders
Documents
on the relevant due dates for payment. It also sets out the agent’s administrative duties
 Issue Comfort Letter and Legal Opinions

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4. Investor Engagement Strategy

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Sales & Marketing Strategy

A multi-pronged marketing approach is used to market transactions, thereby securing the maximum level of demand to drive a successful
deal

 An oversubscribed order book will allow pricing to be tightened

Price at the
 Allocate bonds to the highest quality, least price-sensitive investors
Tightest Spread
 Excess demand provides follow-through in the secondary trading

 Book build globally

Build a Large
 Generate orders through key target investors
Book
 Goal is to develop a high quality, oversubscribed order book

Roadshow  Identify key investors globally

Covering Key  Regional Asian & domestic target investors will provide the backbone for the offering
Financial  Key investors with appetite and who have participated in other recent Asian offerings
Centers

Establish Value  Establish relative value versus comparable credits

& Position
Credit  Position credit favorable versus similar peers

Position Credit  A variety of marketing tools will be utilised including a physical international roadshow, Net roadshow and investor conference calls
Profile  The credit story will be communicated to potential investors effectively and any credit issues will be addressed

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Deal Roadshow
Deal Roadshow

Post mandate announcement, Issuers conduct a deal roadshow to provide business updates to investors. For Issuers, such
as EXIM, who are already familiar to the investor community can also consider intra-day execution

✓ A formal deal roadshow is important from a price discovery process standpoint

✓ A deal roadshow allows to issuer to collect pricing feedback from Investors, collection of IOIs and preparation of a shadow orderbook which ensures that the
transaction is announced at the right IPG, which is key to delivering a successful transaction
✓ Deal Roadshows give an opportunity to cover investors who might have been missed during the previous exercise
✓ A transaction may be launched immediately after the Roadshow depending on investor feedback and market conditions

Key Engagement Tools

Physical Roadshow and Investor E-Meetings

Calls
✓ All conventional marketing tools
such as a physical deal
roadshow and investor calls will
be employed to boost the profile
amongst the international bond
investor community
“Red Herring”
Net Roadshow
✓ A net roadshow will be prepared
ensuring that investors who are
unable to attend the investor
meetings are able to view the
Company’s credit strengths
highlighted through the roadshow
Investor Calls presentation
Bloomberg Roadshow
Offering Circular
✓ An offering circular will be ✓ Recent pandemic has led to new
prepared that will adequately format for having e-meetings with
highlight all of the Company’s investors gaining traction
credit strengths which will
influence investors’ investment
decisions

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Ongoing Post-deal Investor Engagement Strategy

Ongoing Investor Engagement is key in maintaining rapport and regular dialogue with the Investor Community. Delinking
marketing exercise from actual execution also minimizes market exposure via intra day execution for future deals. This
investor engagement method is used extensively by established Indian Issuers such as EXIM India, Reliance Industries,
Bharti, SBI, ICICI Bank etc.

The following tools can be used to ensure ongoing engagement :

Fixed Income Investors Fixed Income Research Analysts Media
✓ Investor Meetings ✓ Access to the investor relations team ✓ One or two relationship based events
The Management should consider a non-deal are commonplace in the market
investor engagement exercise to meet investors in ✓ Conference call on quarterly results
key financial centers and provide regular business ✓ Possible examples could involve
updates at least once in year (if not twice) ✓ Events related disclosure – A prompt providing key reporters from major
email with the press may be release publications to attend sporting events/
✓ Investor Calls
sent to analysts seminars
The Management can organise investor calls,
supplemented by investor presentation, post
financial result announcements, to highlight key
updates to the investor community
✓ Reverse Roadshows
Standard Chartered organizes yearly credit
conferences, wherein numerous investors visit India.
This provides Issuers with a platform to provide
business updates to the investors and address
investor queries in a short span of time and in the
comfort of their home city
✓ Events related disclosure
A prompt email with the press release may be sent
to investors

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Deal Roadshow Schedule

Typical Meeting Schedule for
Typical Meeting Schedule for
Typical Roadshow Schedule London, New York, Boston and Los
Singapore and Hong Kong
Angeles

Day 1 Singapore Bond Meetings 07:30 Private Breakfast 07:30 Private Breakfast

08:45 – 9.45 Group Meeting

08:30 – 9.30 1 on 1 Meeting
Day 2 Hong Kong Bond Meetings
10:00 – 11.00 Group Meeting
10:00 – 11.00 1 on 1 Meeting
Day 3 London Bond Meetings
11:15 – 12.15 Group Meeting
11:30 – 12.30 1 on 1 Meeting
Day 4 New York Bond Meetings 12:30 – 14.15 Private Lunch

12:45 – 14.00 Private Lunch

14:30 – 15.30 Group Meeting
Day 5 Boston Bond Meetings
14.30 – 15.30 1 on 1 Meeting
15:45 – 16.45 Group Meeting

Day 6 Los Angeles Meetings 16.00 – 17.00 1 on 1 Meeting

17:00 – 16.00 Group Meeting

 The schedule is flexible and can be tailored to suit the travelling team. SCB will organize all logistics and leverage our sales team’s relationships to target and
secure a strong line-up of key investors for management to meet
 SCB will also assist the management in preparing an extensive investor presentation, which can be carried by the management for the investor meetings
 For other financial centers not visited on the physical roadshow, conference calls can be organized

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5. Pricing Methodology and Investor Mix

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Investor Pricing Methodology ~ Debut vis a vis Repeat

Issuer
Investors adapt different strategy for debut issuance vis a vis pricing repeat issuance with similar structural features

 Debut issuance requires extensive investor education which is initiated with understanding of credit, engagement with management
and detailed discussion at investor
 Investors benchmark issuer with existing comparable either in the country or in the region (specifically Emerging Market complex) and
basis Relative Value, asset strength and other softer aspects as Corporate Governance, management quality arrive at fair value from
issuance perspective
Debut Issuance
 Investors engage with Sales desk of Banks to have any queries addressed or any specific parameters they need to consider for
assigning fair value to the issuance. Investor credit team and portfolio manager are extensively involved in evaluating and assigning
value to the credit
 Considering this being debut issuance and in the event it could be frequent borrower, investors could expect slight premium vis a vis
Fair value, specifically considering extensive credit work done at investor end

 Repeat issuers are normally priced basis existing secondary benchmark curve (parameters as explained in the next slide)
 Investors holding instruments are consistently monitored on financial & operational performance. However, repeat issuance further
provides investors an opportunity to understand business environment and management plans
 Investors adapt methodology such as curve extension, comparable curve differential analysis for arriving at Fair Value for the
Repeat issuance
Issuance
 Investors further look at existing market conditions and consider parameters such as New Issue Premium for arriving pricing views
 Investors consistently engage with Sales team to understand these parameters and accordingly arrive at pricing views
 Structural features such as an amortizing bond, odd tenor could lead to investor seeking slight premium from pricing perspective,
considering impact of these structural features impacting overall asset portfolio of investors

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Indian Bank – Actively traded USD senior bonds

Bonds TSY Spd YTM Price Z Spd G Spd Mdys/S&P Maturity

EXIMBK 3⅛ 21 98/73 1.12/0.87 101.19-101.34 92/66 104/79 Baa3/BBB- 07/20/21

EXIMBK Float 22 120/95 1.43/1.18 99.66-100.09 107/107 Baa3/N.A. 08/21/22
EXIMBK 4 23 108/93 1.28/1.13 105.58-105.90 105/90 112/97 Baa3/BBB- 01/14/23
EXIMBK 3⅞ 24 128/113 1.68/1.53 106.91-107.41 139/124 145/130 Baa3/N.A. 03/12/24
EXIMBK 3⅜ 26 150/140 1.90/1.80 107.87-108.42 138/128 141/131 Baa3/BBB- 08/05/26
EXIMBK 3⅞ 28 145/136 2.38/2.29 109.77-110.39 172/163 170/161 Baa3/N.A. 02/01/28
EXIMBK 3¼ 30 148/140 2.41/2.33 106.84-107.52 158/150 155/147 Baa3/BBB- 01/15/30
AXSBIN 2⅞ 21 143/118 1.58/1.33 100.60-100.71 136/111 149/124 Baa3/BB+ 06/01/21
AXSBIN 3 22 186/161 2.01/1.76 101.60-102.01 180/154 188/163 Baa3/BB+ 08/08/22
BOBIN 3½ 22 163/138 1.77/1.52 102.22-102.54 156/131 166/141 Ba1/N.A. 04/04/22
BOBIN 3⅞ 24 185/168 2.25/2.08 105.14-105.70 195/178 201/184 Ba1/N.A. 04/04/24
BOIIN 6¼ 21 218/168 2.33/1.83 100.67-100.75 210/160 225/176 WR/BB+ 02/16/21
CBKIN 3¼ 22 170/150 1.85/1.65 102.28-102.61 163/143 171/151 Ba1/N.A. 08/10/22
CBKIN 3⅞ 24 183/165 2.23/2.05 105.19-105.78 193/175 199/181 Ba1/N.A. 03/28/24
ICICI 3¼ 22 163/144 1.78/1.58 102.50-102.84 157/137 164/144 Baa3/BBB- 09/09/22
ICICI 4 26 182/172 2.22/2.12 108.80-109.32 174/164 178/168 Baa3/BBB- 03/18/26
ICICI 3.8 27 172/160 2.65/2.53 107.32-108.12 200/188 198/186 Baa3/BBB- 12/14/27
IIBIN 3⅞ 22 296/236 3.11/2.51 101.00-101.79 290/230 299/239 Ba1/N.A. 04/15/22
SBIIN 3¼ 22 121/96 1.35/1.10 102.08-102.36 115/90 125/100 Baa3/BBB- 01/24/22
SBIIN 4 22 121/95 1.35/1.10 102.91-103.19 115/90 125/99 Baa3/BBB- 01/24/22
SBIIN 4½ 23 130/117 1.50/1.37 108.17-108.54 124/111 130/117 Baa3/BBB- 09/28/23
SBIIN 4⅜ 24 134/123 1.74/1.63 107.95-108.30 146/135 152/141 Baa3/BBB- 01/24/24
SBIIN 4⅞ 24 136/123 1.76/1.63 110.07-110.52 146/133 152/139 Baa3/BBB- 04/17/24
YESIN 3¾ 23 416/367 4.36/3.87 98.75-99.75 413/364 421/371 B3/N.A. 02/06/23

Source: Bloomberg as of 10th December, 2020 23

CONFIDENTIAL

Secondary Market Taxonomy

 Benchmark – This is default benchmark curve nearest to instrument

maturity

 Spread – This is the arithmetic different between Yield and relevant

treasury rate
 Spread over benchmark is risk premium over risk free asset (US
Treasury)

 Price – Current trading price of Bonds on secondary desk

 Yield – Yield on instrument basis current Price
 Yield and Price carry inverse relationship

 G Spread - Spread between the bond yield and interpolated yield of

the Government curve
 This is primarily used by investors for pricing instruments as this
consider benchmark curve

 Z Spread – Spread that is added to the spot curve so that a security's

discounted cashflows equals its price, with each dated cashflow
discounted at its own rate

24
CONFIDENTIAL

Target Investors
 Long tenor real money investors. Preference is to participate in longer tenor offering (preferably 10 years or
more)
Insurance
 In terms of appetite preference remains towards substantial allocation and one of the held to maturity
investors. One of the anchor supports for follow on offering even in volatile market conditions

Pension /  Another key real money investors and prefer to remain invested in the longer end of the curve
Sovereign
 Hold to maturity investors and focus on building long term relationship
Wealth Fund

 Deepest liquidity pool and on majority of trades maximum allocations is towards this investor segment
Mutual Funds
 Preference for tenor is 5 years and remains one of active participants in the secondary markets

 Hedge funds are typically short term investors which provide momentum to primary book as well as strong
secondary market participation
Hedge Funds
 Tenor preference remains upto 5 years and we are seeing some of Hedge Funds being core investors in
primary offerings

 Relatively smaller investor liquidity pool and investment either via trading desk or loan in the form of bonds
Banks
 Preference remains shorter end of the curve and substantial liquidity pool on FRN structures

 Private Banks provide strong momentum to the books and tenor preference remains upto 5 years
Private Banks  Private Banks demand in driven on leverage provided to them and are one of the active participants in the
secondary markets

25
CONFIDENTIAL

Key Investors by Region

New York Hong Kong
Blackrock Lazard AIA HSBC AM
Alliance Bernstein Oppenheimer AGI Income Partners
GSAM HSBC AM Alliance Bernstein Invesco
JPMIM Marathon BEA Union JFAM
MSIM NWI BFAM Legal & General
Prudential Lord Abbett
BOC AM Manulife
TIAA AIG
China Industrial Finance Myriad
MetLife
CIC Nine Masts
Dah Sing Bank Pinebridge
Boston
Fidelity Prudence
Fidelity Eaton Vance
Guotai Junan AM Segantii
Wellington Standish
Great Wall T Rowe
Loomis Barings
Harvest Value Partners
MFS GMO
HKMA Wellington
Manulife
HPS Wing Lung Bank

Los Angeles
Pimco Doubleline Singapore
Guggenheim Payden Aberdeen Lion Global
WAMCO Capital Group AIA Loomis Sayles
TCW Pacific Life Allianz MS IM
Amundi MUTB
Europe Ashmore Neuberger Berman
Aberdeen / Standard Life Barings EMSO Investec AM PenSam Blackrock Nikko AM
Amundi / Pioneer BMO Fidelity London Jupiter AM Rogge BOS PB NN Investment
Ashmore Candriam AM Finisterre KBC AM Spinnaker Cathay United Bank Nomura AM
Aventicum Carmignac First State Investment Legal & General Stone Harbour Citi PB Pictet AM
Aviva Danske Fisch AM M&G Suva CSAM PIMCO
AXA Investments DekaInvest GAM Moore Capital SwissKanto / ZKB Eastspring Schroders
Banca IMI Delta Lloyd GLG Muzinich Capital Threadneedle Fullerton UBS GAM
Bluebay DWS Henderson Observatory Capital Union Investment GSAM UOB AM
Bluecrest Eurizon Capital Insight IM Pinebridge Vontobel AM GIC WAMCO

26
CONFIDENTIAL

6. Case Studies: Latest EXIM USD Issuances

27
CONFIDENTIAL

Export-Import Bank of India

USD 1 billion 3.250% Senior Unsecured Fixed Rate Notes due 2030

Transaction Summary Investors by Geography and Type

Issuer Export-Import Bank of India
10% 1%
Country of Transaction India
20%
Issue Type Senior Unsecured Fixed Rate Notes
Expected Issue Rating Baa2 / BBB- / BBB- (Moody's / Fitch / S&P)
13%
Pricing Date 6 January 2020
Export-Import Bank of India Settlement Date 15 January 2020
Tenor 10 years
USD 1 billion Issue Size USD 1 billion 44%
Coupon 3.250% 58%
Issue Price / Yield 99.543 / 3.304% 36% 18%
3.250% Senior Unsecured Maturity Date 15 January 2030
Fixed Rate Notes Listing ISM of London Stock Exchange, SGX-ST, India INX, NSE IFSC
due 2030 Format 144A / RegS Category 2
Joint Lead Manager & To provide funding for (a) export lines of credit (LOCs) and buyer’s credit granted by the Issuer to overseas Asia US EMEA Fund Managers
governments, banks, institutions and other entities; (b) loans for overseas investment and/or participation in equity of the Banks
Joint Bookrunner Use of Proceeds overseas joint ventures; and (c) import of capital goods by export oriented units; (d) concessional financing scheme; and
(e) foreign currency loans. Proceeds will be used as per applicable laws of India, including the External Commercial Insurance / Pension Funds
Borrowing guidelines issued by the Reserve Bank of India CB / Official Ins
Governing Law English Law Private Banks
January 2020
Role of SCB Joint Lead Manager & Joint Bookrunner

Transaction Highlights
On Monday, 6th January 2020, Standard Chartered Bank (“Standard Chartered”) has successfully priced a USD 1 billion Fixed Rate Senior Unsecured 144A / Reg S issuance for Export-Import
Bank of India (“EXIM” or the “Issuer”) for 10 year tenor, at CT10 + 150 bps. The issuance achieved several milestones, namely:
✓ Lowest ever coupon for a USD 10 year issuance from an Indian issuer
✓ Tight pricing with zero new issue premium - remarkable achievement considering significantly weaker market backdrop owing to geopolitical tensions
✓ First single tranche USD 1 billion issuance from India since EXIM Bank’s USD issuance in 2018
✓ Market opening trade from India, also marking the first G3 issuance from a Asia Policy Institution and the largest FI issuance from Asia this year
 Meeting the Client’s Key Objective – Being the third 144A / Reg S transaction, EXIM India had multiple targets in mind including establishing a liquid, tightly priced 10 yr benchmark with high quality
investor participation across Asia, Europe and US. The pricing of CT10 + 150 bps achieved was at the fair value of EXIM’s secondary bonds and well inside the initial price guidance of CT10 + 175 bps
area, representing significant price tightening of 25bps, which was a remarkable feat given the weak market backdrop on the back of geopolitical tensions. The transaction was able to achieve the lowest
headline coupon for a 10year USD issuance by an Indian entity. The quasi sovereign nature of issuer, EMBIG index eligibility of the notes, scarcity of quality FI paper in 10 year tenor from India coupled
with extensive marketing exercise by the top EXIM management in 2019 resulted in establishing the tightly priced benchmark for Indian papers.
 Strong Demand from high quality Investors – Orders flowed in steadily, as soon as the transaction was announced, with strong participation witnessed from institutional investors across Asia, Europe
and US. The strong issuer demand was accentuated given good start-of-the-year liquidity in market, demand for high quality name like EXIM and EMBIG eligibility of the issuance. The transaction saw a
final order book of over 2.7 billion, achieving an oversubscription ratio of >2.7x, across over 184 accounts, including some very high quality real money names.
 Astute and Well-Timed Execution Strategy – Having swiftly updated their GMTN program, client took advantage of the strong market sentiment and fresh allocation of funds in the new year to move
forward with this important transaction. This proved to be a highly successful strategy with strong orderbook and record pricing - tightest coupon ever achieved by any Indian entity in the 10 year segment.
 Unparalleled Execution Capabilities – Standard Chartered acted as the Joint Bookrunner and Joint Lead Manager for the transaction. We advised the client throughout the transaction by continuously
monitoring the market and providing regular market updates to ensure EXIM Bank was well positioned to capture the strong market window. This is a repeat mandate for Standard Chartered and is further
testament to our superior execution skills. Standard Chartered has now assisted EXIM in executing 14 FCY Bond since 2011 across currencies such as USD, SGD, CNH and JPY helping them raise ~
USD 7.2 bn. The deal further cements Standard Chartered’s position as the #1 Bookrunner in Indian FCY Bond Markets reflecting our unmatched structuring and distribution capabilities.

28
CONFIDENTIAL

Export-Import Bank of India

USD 500 million 3.875% Senior Unsecured Fixed Rate Notes due 2024

Transaction Summary Investors by Geography and Type

Issuer Export-Import Bank of India
Country of Transaction India 13% 7%
Issue Type Senior Unsecured Fixed Rate Notes
Expected Issue Rating Baa2 / BBB- (Moody's / Fitch) 20%
Pricing Date 5 March 2019
Export-Import Bank of India Settlement Date 12 March 2019
Tenor 5 years 44%
USD 500 million Issue Size USD 500 million
Coupon 3.875%
Issue Price / Yield 99.658 / 3.951%
3.875% Senior Unsecured Maturity Date 12 March 2024
Fixed Rate Notes Listing SGX and LSE ISM 87% 29%
Format RegS only
due 2024 The net proceeds w ill be utilized in compliance w ith the approval issued by the RBI and regulatory
guidelines applicable to external commercial borrow ings under Indian law to provide funding for: (a) export
Joint Lead Manager lines of credit (LOCs) and buyer ’s credit granted by the Issuer to overseas governments, banks, institutions
Asia FM/AM Banks
Use of Proceeds
and other entities; (b) loans for overseas investment and/or participation in equity of the overseas joint Europe/Offshore US
ventures; and (c) import of capital goods by export-oriented units Insurance/SWF Private Banks
March 2019 Governing Law English Law
Role of SCB Joint Lead Manager and Joint Bookrunner

Transaction Highlights
On Tuesday, 5th March 2019, Standard Chartered Bank (“Standard Chartered”) has successfully priced a USD 500 million Fixed Rate Senior Unsecured Reg S only issuance for Export-Import Bank of India
(“EXIM” or the “Issuer”) for 5 year tenor, at CT5 + 140 bps. The issuance achieved several milestones, namely:
✓ Tightest spread over US Treasury for an Indian issuer in YTD2019, helping re-price the secondary Indian banks curve
✓ Tightest spread for 5Y issuance for Export-Import Bank of India ever, implying NIL new issue premium
✓ First fixed rate Reg S only public market issuance for Export-Import Bank of India since January 2016
✓ There have been five FCY IG deals in the public market which have been priced from India since start of the year and Standard Chartered is the only common bank across all trades – A testament to our
market leading CM franchise
 Meeting the Client’s Key Objective – EXIM India had multiple targets in mind including establishing a liquid, tightly priced 5Y benchmark with high quality investor participation across Asia and Europe. The pricing of CT5 +
140 bps achieved was at the fair value implying zero new issue premium. The quasi sovereign nature of issuer and EMBIG index eligibility of the notes resulted in establishing the most tightly priced 5Y benchmark for EXIM,
while also re-pricing the curve for Indian papers
 Strong Demand from high quality Investors – Orders flowed in steadily, as soon as the transaction was announced, with strong participation witnessed from institutional investors across Asia and Europe including some
very high quality real money names. The strong issuer demand was accentuated given demand for high quality name like EXIM and EMBIG eligibility of the issuance. The transaction saw a final order book of over USD 1.7
billion, achieving an oversubscription ratio of >3.4x, across over 117 accounts. The final allocation had 87% participation from Asia and 13% from Europe/Offshore US with 44% investment from fund managers and asset
managers, 29% from banks, 20% from insurance and sovereign wealth funds and 7% from private banks
 Astute and Well-Timed Execution Strategy – Having updated their GMTN program in September 2018, client took advantage of the strong market sentiment to move forward with this important transaction. The transaction
necessitated swift and tactful execution, given the geopolitical tensions associated with India in the days leading up to the transaction. Issuer decided to launch the transaction via an intraday execution at Asia morning on
Tuesday, March 5, post easing of the geopolitical tensions, to achieve best possible execution in terms of price and size. This proved to be a highly successful strategy with strong orderbook and record pricing - tightest
spread over treasury for EXIM in the 5 year segment
 Unparalleled Execution Capabilities – Standard Chartered acted as the Joint Bookrunner and Joint Lead Manager for the transaction. We acted as the documentation bank for this transaction and advised the client
throughout by continuously monitoring the market and providing regular market updates to ensure EXIM Bank was well positioned to capture the right market window. This is a repeat mandate for Standard Chartered and is
further testament to our superior execution skills. Standard Chartered has now assisted EXIM in executing 12 FCY Bond since 2011 across currencies such as USD, SGD, CNH and JPY helping them raise ~ USD 6.1 bn
 Cementing the #1 Position of Standard Chartered’s Capital Markets Franchise – The deal further cements Standard Chartered’s position as the #1 Bookrunner in South Asian FCY Bond Markets reflecting our
unmatched structuring and distribution capabilities. There have been five FCY IG deals in the public market which have been priced from India since start of the year and Standard Chartered is the only common bank across
all trades

29
CONFIDENTIAL

Appendix: Market Update

30
CONFIDENTIAL
2020 : The year that was (1/2)
2020 has been quite an eventful year. As we approach year-end, there is plenty to reflect on.
We have provided below a brief summary of what the year has looked like for the credit markets and what we can expect moving into 2021.
Starting the year on a promising note
 The year started out on a strong note with
Asia ex-Japan G3 issuance volumes at ~
$46BN in Jan 2020, marking the largest
Jan on record (+45% up from 2019 and
+34% up from the previous record holder
Jan’18).
 Demand for Indian credit was strong
despite the expectations of high issuance
volumes from India during the previous
year, which encouraged a number of first-
time issuers to tap the markets and receive
a strong response from investors.
 With travel restrictions coming into place,
from a marketing standpoint we saw
executions moving to “investor-calls” with
no more face to face meeting and
therefore, issuers were able to hit markets
quicker than in the past.
Treasury yields rose as investors remain optimistic over a possible vaccine and stimulus talks
2.8 5 year
2.4
2.0
Yield (%)
1.6
1.2
0.8
0.4
0.0
Dec-19 Feb-20 Apr-20
Sources: Bloomberg, as at 02 December 2020
The COVID meltdown
 The full impact of the pandemic came into the
picture towards the last week of February as the
COVID19 cases started emerging in Europe and
US. We started seeing risk assets coming under
pressure with stocks/ commodities selling off.
 Toward mid-March, moves in risk assets and
secondary technical were unprecedented. We
saw long dated Treasury yields declining to their
all-time lowest levels (to give a perspective, at the
start of the year consensus forecast of 10Y US
treasuries for Q12020 was 1.50%, whereas we
saw the 10Y UST drop to 0.54% on 9th March
and end the quarter at 0.67%).
 The US Volatility Index also reached an all time
highs of 82.7. Of particular concern were the
magnitude of the actual outflows in both IG and
HY and the amount of selling by real-money in
anticipation of potential additional outflow.
10 year 30 year
Volatility (%)
1.69
0.94
0.41
Jun-20 Aug-20 Oct-20 Dec-20
Path to recovery
 With economic lockdown across geographies and supply chain disruptions we saw
Central Banks across geographies responding to this crisis with “whatever it takes”
measures, including significant rate cuts and balance sheet measures.
 Global investor base drew strong comfort from proactive actions taken by Central
Banks. We saw March being a record month from primary issuance perspective in
the US. In terms of supply we saw >$261bn of IG USD supply in March 2020, vs
previous monthly record of $177bn in May 2016, demonstrating strong investor
interest specifically towards developed markets issuers.
 The market rally slowly spilled over to Emerging Markets space including Asia.
Towards the end of March, we saw a market opening trade from Asia by AIA after a
3-week hiatus.
 Since reopening of trade from Asia, there have been over 559 G3 tranches priced in
the region for an overall volume of over $257bn (2.8% higher on a year-on-year
basis), which points towards the strong liquidity that the market has seen, despite
periodic volatility on account of the US Presidential elections and ongoing
development on the vaccine front
Volatility declined owing to strong economic data and vaccine possibility
90
VIX: Market estimate of future volatility, based
70 on the weighted average of the implied
volatilities of options traded on the CBOE
50
30
21.17
10
Dec-19 Feb-20 Apr-20 Jun-20 Aug-20 Oct-20 Dec-20
31
CONFIDENTIAL

2020 : The year that was (2/2)

The Post-election world Focus shifts to 2021

 In the weeks leading up to the US election, the UST yield curve (5Y/30Y) steepened to the widest
spread since late 2016. US rates volatility also increased. The growing fear in the rates market was
that a Democratic clean sweep of the White House and Congress would lead to a fiscal spending
programme of as much as USD 3.9tn. The prospect of such a supply increase, along with growing
inflation expectations, contributed to growing fears of a surge in long-term interest rates.
 Post the volatility seen in the past few months on account of the pandemic and uncertainty around US
Presidential Elections, the markets have witnessed a tilt towards risk-on mode following Joe Biden
being elected as the 46th President of the US and positive developments on the vaccine front.
 Recent vaccine progress is a potential game-changer, as a result of which we have seen a strong rally
in US equities (which have marked all-time highs in the last few weeks)
 10Y UST yields have risen towards 1% in recent trading sessions as a result of vaccine-driven
optimism and talks around a new stimulus deal. However, in the near-term, we expect COVID-related
growth concerns to more than offset vaccine-driven optimism about a return to economic normalcy,
preventing 10Y USTs from going higher than 1%.
 The top-down environment is likely to be positive for risk assets in 2021, with the
macro backdrop supporting EM hard-currency debt. While a vaccine is unlikely
to be widely available before H2-2021, it should support economic normalisation
and boost EM credits.
 With global rates remaining well-anchored in a low-growth environment, we
expect healthy inflows to EM hard-currency debt in 2021 which would provide
investors with a healthy pickup in terms of yields.
 In the current supportive environment – with a large amount of cash still on the
sidelines and a sizeable USD 15.7tn of negative-yielding debt globally – we
expect investors to continue to favour allocations to EM.
 We believe the continued recovery in EM assets will be driven by three factors:
(1) a decline in risk premia, (2) a resurgence of capital inflows in search of higher
returns, and (3) low inflation, which will allow central banks to keep monetary
policy loose even as fiscal stimulus is deployed to support the recovery.

 The volatility index has declined to 21.2, amongst the lowest seen since the start of the crisis. Further,
we have seen that the credit spreads are back to pre-COVID levels on the IG side with iTraxx AeJ IG
5Y trading at 58 (against highs of over 220 seen in April and pre-COVID levels of c.52)
 Fund flows for the week ended 27 November suggested that EM funds continue to see strong flow
momentum as support from institutional funds and ETF’s contributed to weekly flows.
 We have seen very limited issuances in the FI space from India this year, which
is expected to boost the investor demand for paper from high-quality FI Issuers.
Further, from an Issuer perspective, with spreads over USTs within touching
distance of their levels at the beginning of the year and spreads between Mid-
swaps and USTs increasing, provides an opportunity for Issuers to raise funding
at attractive spreads over Mid-swaps.

Asian credit spreads tightened Spread differential between UST and Mid-swaps has increased over the past year
800 3 Differential between 3Y UST and MS 2.0
Itraxx Asia IG Itraxx Asia Sov EMBI
Credit Default Swap

Spread Diff. (5yr)

Differential between 5Y UST and MS
Spread Diff. (3yr)
Spread (bps)

600
2
400 1.0
353
1
200
137
58 0 0.0
0
Dec-19 Feb-20 Apr-20 Jun-20 Aug-20 Oct-20 Dec-20 Dec-19 Jan-20 Mar-20 May-20 Jun-20 Aug-20 Sep-20 Nov-20

Sources: Bloomberg, as at 02 December 2020 32

CONFIDENTIAL

US Treasury & General Market Overview

10-year Treasury yield rose on hopes of more domestic fiscal
▪ US Treasury yields rose
Wednesday on hopes of more
Long dated Treasury yields continue to remain volatile stimulus and that vaccines would spark an economic recovery
domestic fiscal stimulus and that 14 2.8
vaccines would spark an 5 year 10 year 30 year 5 year 10 year 30 year
economic recovery. The 10-year
12 5Y 10Y 30Y 2.4
UST rose 2bps on Wednesday to
close at 0.936%, however, posted High 13.83 13.95 13.90
a mid-weekly loss of 3bps 10 Low 0.19 0.51 1.00 2.0

1.68
▪ US Senate Majority Leader Mitch
Yield (%)

Yield (%)
8 1.6
McConnell said on Wednesday
that lawmakers were still striving
for agreement on COVID-19 aid, 6 1.2
as a bipartisan group released 0.94
details of their proposal and the 4 0.8
U.S. House of Representatives
prepared to vote on a one-week
2 1.68 0.4 0.40
funding bill to provide more time
for a deal 0.94
0.40 0.0
0
Dec-19 Feb-20 Apr-20 Jun-20 Aug-20 Oct-20 Dec-20
▪ On the data front, Weekly 1983 1989 1995 2001 2008 2014 2020
Mortgage Application for the week Volatility gained on the hopes of a stimulus package and
ending Dec 4, witnessed a 1.2% positive news on the Covid-19 vaccine
decline as the year end
Consensus Forecast: Key Economic Data and Rates
approaching, however, Refinance 90
VIX: Market estimate of
applications bounced back for a Q4 Q1 Q2 Q3 Q4
future volatility, based on the % Current
rare 2020 decrease, with the 80 2020 2021 2021 2021 2021
weighted average of the
Refinance Index increasing by 2%. implied volatilities of options
Refinances are still up 89% y-o-y, 70 Fed Funds
traded on the CBOE 0.25 0.25 0.25 0.25 0.25 0.25
continuing to power the majority of Target Rate
Volatility (%)

mortgage transactions. 60
Meanwhile, the seasonally 2Y UST 0.15 0.15 0.15 0.20 0.25 0.35
adjusted Purchase Index 50
10Y UST 0.94 0.75 0.75 1.00 1.25 1.40
decreased by 5% and saw a 29%
increased on an unadjusted basis. 40
The Purchase Index was 22% y-o- % 2019 2020 2021 2022
y 30
US GDP 2.20 -3.70 2.10 3.80
20 22.27

US CPI 1.70 1.40 1.80 1.80

10
Dec-19 Feb-20 Apr-20 Jun-20 Aug-20 Oct-20 Dec-20

Sources: Bloomberg, Standard Chartered Bank, as at 09 December 2020 33

CONFIDENTIAL

Credit Market Backdrop

▪ Fund flows for the week Institutional fund flows continue to dominate overall flows to EM assets
ended 4 December witnessed
risk-seeking flows across EM 16 2013 2014 2015 2016 2017 2018 2019 2020
assets and DM equities. 12 YTD
Institutional flows into EM LCY 12 10
debt fund gained momentum 9
8
777
EM Fund Flows (US$ bn)
7 6 7
likely due to risk deployment 8
6
6 6
6 6
5 5 5 5 5
ahead of 2021, receiving the 4 4 4
3 4 4 4 3 3 33 3 3 3
3 334
4 2 2 3 32
largest weekly inflows since 1 2 2 1 2 2 2
101 11 1 1 1 1
13 November 2019
0
0 0 -1 0
▪ EM debt funds saw inflows of -2 -2 -2 -2 -2 -2 -2
-1
-2 -2 -2 -1
-4 -3 -3 -3-2 -3
USD1,798m, while HY funds -5
-3
-5 -4 -4
-5 -5-5 -5
saw small inflows of USD66m -8 -5 -6 -6
-8
-8
-12
-12
-16
J FMAM J J A SOND J FMAM J J A SOND J FMAM J J A SOND J FMAM J J A SOND J FMAM J J A SOND J FMAM J J A SOND J FMAM J J A SOND J FMAM J J A SOND

Credit spreads have declined significantly

1200 iTRAXX Euro Cross-Over iTRAXX Euro IG Hi-Vol US HY Bonds US IG Bonds

1080

960

840
Spreads (bps)

720

600

480
404
360

240 242

120 110
48
0
Dec-19 Feb-20 Apr-20 Jun-20 Aug-20 Oct-20 Dec-20

Sources: Bloomberg, Standard Chartered Bank, as at 09 December 2020 34

CONFIDENTIAL

Asia Credit Market Backdrop

▪ First half of the week saw 10
issuers tap the AEJ market across
Asian credit spreads tightened Asian CDS remain volatile
10 tranches for volume totaling 650 Itraxx Asia IG Itraxx Asia Sov EMBI 300 INDON MALAYS THAI PHILIP KOREA
~USD3.9bn
600

Credit Default Swap Spread (bps)

▪ SCB was involved in the following 550 250
deals: 500
450 200
– SND International Bvi Co Ltd (- / 400
- / BBB+ ) priced a USD300m 3y
RegS notes 350 354
150
300
– SMC Global Power (- / - / -) 250
priced a USD300m tap to its 100
200
existing 7.000% PerpNC5 Reg S
69
notes 150 137
38
50 36
100
36
– Vedanta Resources Ltd (- / B- / - 50 58 22
) priced USD1.0bn 3NC2 RegS 0
0
notes Dec-19 Feb-20 Apr-20 Jun-20 Aug-20 Oct-20 Dec-20 Dec-19 Feb-20 Apr-20 Jun-20 Aug-20 Oct-20 Dec-20
AEJ G3 primary markets volume in 2020YTD is 3.3% October 2020 saw higher issuance volumes as compared
▪ Asia ex-Japan G3 primary market
issuance volume stood at
higher as compared to the same period in 2019 to the same period in previous years
USD339bn in 2019, 26% higher 400 55
than the same period in 2018. 3.3% 2016 2017 2018 2019 2020
AEJ G3 Bond Issuance (US$ bn)

2020YTD issuance volume 350 46 47 YTD

26%

AEJ G3 Monthly Bond Issuance (US$

44
stands at USD346bn, 3.3% higher 44 41
300 40 39
than the same period in 2019 38
35 36 35 37
37 36
250 33 32
30 31
33 29 29 292928 29
200 25 2525 26 26 24
25 24 25 24

bn)
22
21 22 23 22
150 22 20 20 21 20 19
17 1818
17
15 16
14 13 14
12 13
100 11 12 11 10
11 9 8
50
130 141 204 173 204 335 268 339 335 346
0 0
2012 2013 2014 2015 2016 2017 2018 2019 2019 2020 JFMAMJ JASONDJFMAMJ JASONDJFMAMJ JASONDJFMAMJ JASONDJFMAMJ JASOND
YTD YTD

Sources: Bloomberg, as at 09 December 2020 35

CONFIDENTIAL

Key Data Events

January 2021 February 2021 March 2021

S M T W T F S S M T W T F S S M T W T F S

1 2 1 2 3 4 5 6 1 2 3 4 5 6

3 4 5 6 7 8 9
7 8 9 10 11 12 13 7 8 9 10 11 12 13

10 11 12 13 14 15 16
14 15 16 17 18 19 20 14 15 16 17 18 19 20
17 18 19 20 21 22 23

21 22 23 24 25 26 27 21 22 23 24 25 26 27
24 25 26 27 28 29 30

31 28 28 29 30 31

Public Holidays Economic Calendar

ECB Non-Farm Bank of
Hong Kong Singapore UK US FOMC
Meetings Payroll England

1 Jan New Year's Day 1 Jan New Year's Day 1 Jan New Year's Day 1 Jan New Year's Day 27 Jan 21 Jan 8 Jan 4 Feb

Martin Luther King Jr.

12-15 Feb Lunar New year 12-13 Feb Chinese New Year 18 Jan 17 Mar 11 Mar 5 Feb 18 Mar
Day

15 Feb Presidents' Day 5 mar

36
CONFIDENTIAL
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regulatory disclosures and the financial standards we adhere to, please visit:- https://www.sc.com/en/regulatory-
disclosures.
LIBOR Discontinuation:-
If you transact any financial products linked to an interbank offer rate (“IBOR”) such as LIBOR, or any synthetic
rate that uses an IBOR in its calculation, there is a risk that such IBOR may be discontinued prior to the maturity
of the financial contract. There are ongoing consultations by different financial regulators and industry groups to
reform or replace certain IBOR rates, and the contractual fallbacks that will apply in the event of an IBOR
discontinuation. When these consultations are finalised, they could cause a positive or negative change in the
value of existing financial contracts, and market participants may be required to incorporate changes into existing
financial contracts by way of amendment. In addition, there is no assurance that the changes will be applied
consistently across all financial products (such as loans and derivatives) so potential mismatches could occur.
Please consult your own independent advisers to consider the potential implications for financial contracts
(including the transaction contemplated by this proposal) before you transact. For further information about
LIBOR and risks related to the use of benchmarks in loans and in debt securities, please see
https://www.sc.com/en/banking/libor/ and https://www.sc.com/en/banking/libor/risks-related-to-benchmarks/.
Subject Companies:-
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regarding this document or any information contained or referred to in this document.
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note the following:
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246833). Australian counterparties should note that this document was prepared for “wholesale clients” only
within the meaning of section 761G of the Corporations Act 2001 (Cth) (Act) and the Corporations
Regulations. This document is not directed at persons who are “retail clients” as defined in the Act. Standard
Chartered Bank (Hong Kong) Limited is exempt from the requirement to hold an Australian financial services
licence under the Corporations Act of Australia in respect of the financial services it provides. Standard
Chartered Bank (Hong Kong) Limited is regulated by the Hong Kong Securities and Futures Commission under
the laws of Hong Kong, which differ from Australian laws.
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Market Counterparties and not to Retail Clients. As a Professional Client, you will not be given the higher retail
client protection and compensation rights and if you use your right to be classified as a Retail Client, we will be
unable to provide financial services and products to you as we do not hold the required license to undertake such
activities. In respect of sukuk transactions, Standard Chartered Bank is acting under the supervision of its Global
Shariah Supervisory Committee. Relevant information on Standard Chartered Bank’s Global Shariah Supervisory
Committee is currently available on the Standard Chartered Bank website in the Islamic Banking section at
http://www.standardchartered.com/en/banking-services/islamic-banking/shariah-supervisory-committee.html.
United Kingdom and European Economic Area: In the United Kingdom Standard Chartered Bank is authorised
by the Prudential Regulation Authority and regulated by the Financial Conduct Authority and Prudential Regulation
Authority. In Germany Standard Chartered Bank AG, a subsidiary of Standard Chartered Bank, is authorised by
the European Central Bank and supervised by the Federal Financial Supervisory Authority (Bundesanstalt für
Finanzdienstleistungsaufsicht-“BaFin”) and the German Federal Bank (Deutsche Bundesbank). This document is
directed at persons Standard Chartered Bank and Standard Chartered Bank AG can categorise as Eligible
Counterparties or Professional Clients (such persons constituting the target market of this communication
following Standard Chartered Bank’s and Standard Chartered Bank AG’s target market assessment) as defined by
the Markets in Financial Instruments Directive II (Directive 2014/65/EU) (“MiFID II”) and the German Securities
Trading Act (WpHG”). No other person should rely upon it. In particular, this is not directed at Retail Clients (as
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risks involved in executing transactions in securities. Any U.S. recipient of this document wanting additional
information or to effect any transaction in any security or financial instrument mentioned herein, must do so by
contacting a registered representative of Standard Chartered Securities (North America) Inc., 1095 Avenue of
Americas, New York, NY 10036, US, tel: +1 212 667 1000.
WE DO NOT OFFER OR SELL SECURIT IES TO U.S. PERSONS UNLESS EIT HER (A) THOSE SECURIT IES
ARE REGISTERED FOR SALE WIT H THE U.S. SECURITIES AND EXCHANGE COMMISSION AND WIT H ALL
APPROPRIATE U.S. STATE AUTHORITIES; OR (B) THE SECURITIES OR THE SPECIFIC TRANSACTION
QUALIFY FOR AN EXEMPT ION UNDER T HE U.S. FEDERAL AND STATE SECURITIES LAWS NOR DO WE
OFFER OR SELL SECURIT IES TO U.S. PERSONS UNLESS (i) WE, OUR AFFILIATED COMPANY AND T HE
APPROPRIATE PERSONNEL ARE PROPERLY REGISTERED OR LICENSED TO CONDUCT BUSINESS; OR
(ii) WE, OUR AFFILIATED COMPANY AND THE APPROPRIATE PERSONNEL QUALIFY FOR EXEMPTIONS
UNDER APPLICABLE U.S. FEDERAL AND STATE LAWS.
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