Additional Tier-1 Securities: View on CIMB Group AT1

·         CIMB Group Holdings raised MYR1b from AT1 to shore up its Tier-1 capital ratio and this is the second Basel 3-compalint AT1 instrument issued in MYR credit universe.

·         We have a stable outlook on the issuer.

·         We come up with a fair value of 5.43-5.63%, using both spread multiple method and comparison with B3T2 instruments adjusted for higher extension risks, although supply-demand dynamics may support the bond to trade at the lower end or below our range estimate.