Asia Pacific bonds

9 October 2026, 08:28 UTC Chief Investment Office GWM Investment Research For investors outside of the US

Asia bond top picks Asia Pacific bonds Authors: Joel Tan, CFA, Analyst, UBS AG Singapore Branch; Devinda Paranathanthri, Analyst, UBS AG Singapore Branch; Eve Li, CFA, Credit Strategist, UBS AG Hong Kong Branch

• Asia credit returns plagued by rising rates: The 60-80bps rise in US Treasury yields so far in 2H26 is weighing on Asia credit, triggered by a significant repricing of the Federal Reserve policy path. Nonetheless, resilient spreads are cushioning the impact on Asia high yield (HY), which has outperformed Asia investment grade (IG) in 2H26.

• Long duration bonds are underperforming: Among our Asia top picks, longer-dated IG and Tier 2 bonds have underperformed over the past month, plagued by higher US rates. Genting Overseas Holding perpetual notes have also suffered a marked drawdown following an issuer rating downgrade by Fitch. In contrast, short- dated China IG credits and high yield names have been more resilient, given their low sensitivity to rates.

• Adjustments to our bond top picks: We are adding Kasikornbank's 6.278% 2036 subordinated Tier 2 bond (callable in 2031) to our top picks list; we view the 6.6% yield-to-call as appealing for a quality Thai bank Tier 2 credit. We are removing Alibaba's 4.5% 2034 bond (YTC 5.9%) on supply concerns in Asia tech and spillover effects from widening US tech spreads. We are adding Meituan's 4.5% 2031 bond (YTC 5.9%) on improved financial performance; current valuations already reflect a potential downgrade. Following these changes, the average yield of our top picks is 6.5%, with an average Claudia Link duration of 4.2 years. Tier 2s are subordinated instruments that carry a variety of • Asia credit positioning: We maintain a barbell approach, with moderate exposure to defensive IG risks, including extension risk (non-call on the first call date segments such as mainland China IG, Hong Kong IG, in a perpetual or callable structure), coupon cancellation risk and financials, alongside select higher-beta exposure in (distributions can be discretionary and non-cumulative), and Asia HY and corporate perpetuals. Opportunistically, we write-down risk (upon breaching a capital trigger or at the also favor select credits that have yet to recover from the point of non-viability). These risks are reflected in instrument Iran conflict-led sell-off. We maintain a short-to-medium recommendations. duration bias given elevated rate volatility.

• Key risks for our top picks include a further escalation in the Middle East conflict that results in severe energy disruptions, rating downgrade risks for certain credits, an extended Fed hiking cycle, or a persistent rise in long-end US Treasury yields on fiscal deficit concerns.

This report has been prepared by UBS AG Singapore Branch, UBS AG Hong Kong Branch. Analyst certification and required disclosures begin on page 13. UBSFS accepts responsibility for the contents of this report. U.S. persons who receive this report and wish to effect any transactions in any security discussed in this report should do so with UBSFS and not UBS AG. Page 1 of 19

Asia Pacific bonds: For investors outside of the US

Source: UBS, as of 8 October 2026 00:00 GMT. Indicative pricing only. Yield-to-call as calculated by UBS.