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Quarterly Economic Growth Release: 5.4% Q12025
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Our Top Picks
We highlight some of the bonds we currently prefer, based on the value they offer and the strength of their credit.
OUR TOP 5 PICKS
Sovereign Bonds
as of May 9, 2025
Republic of the Philippines
- Issuer: Republic of the Philippines
- Credit Rating: Baa2 / BBB+ / BBB
- Bond:
- Indicative Yield-to-Maturity (YTM): 4.226% 4.414% 3.168% 4.800%
The Philippines is among the fastest-growing emerging market economies, though its gross domestic product (GDP) per capita remains relatively low at USD 3,870 per year, comparable to Egypt. The economy is driven primarily by business process outsourcing (BPO) and tourism, with a sizable manufacturing sector specializing in electronics, automotive production, and food processing. While the country has limited natural resources, it is a key global supplier of nickel ore. Looking ahead, strong economic growth is expected to continue, which could lead to higher per capita income and increase the likelihood of sovereign credit rating upgrades.
OUR TOP 5 PICKS
Corporate Bonds
as of May 9, 2025
SK Hynix
- Issuer: SK Hynix
- Credit Rating: Baa2 / BBB+ / BBB
- Bond: HYUELE 5.5 29
- Indicative Yield-to-Maturity (YTM): 4.879%
SK Hynix is one of the world’s largest memory semiconductor companies. As an Integrated Device Manufacturer (IDM), it engages in the design, manufacture, and sale of advanced memory semiconductors. We expect SK Hynix’s leverage to continue trending lower over 2025 on resilient topline growth, robust EBITDA margin, strong free operating cash flow (FOCF), and lower debt. It now trades in-line with Micron, slightly wider than US BBB tech and ~25 basis points tighter than Asia BBB+/BBB corporates.
Amazon.com
- Issuer: Amazon.com
- Credit Rating: A1/AA/AA-
- Bond: AMZN 4.65 29
- Indicative Yield-to-Maturity (YTM): 4.220%
Amazon is an e-commerce company which sells a wide range of its own products and those of 3rd party sellers. Amazon offers fulfillment services for 3rd party sellers and sells cloud computing services. We continue to have confidence in CEO Andy Jassy and the company’s long-term business for both AWS and Stores. The recent operating trends reinforce our views, particularly the margin improvement. We continue to believe that Amazon is an underappreciated winner in generative AI given the breadth of its cloud business and offerings, including custom silicon and its platform Bedrock. We estimate gross leverage declined to 0.4x and 0.9x on a lease-adjusted basis.
SM Investments Corporation
- Issuer: SM Investments Corporation
- Credit Rating: Unrated
- Bond: SMPM 5.375 29
- Indicative Yield-to-Maturity (YTM): 5.012%
- SM Investments is a leading Philippine conglomerate that is invested in market-leading businesses in retail, banking, and property. It also invests in ventures that can capture high growth opportunities in the emerging Philippine economy.
- It has a stake of about 77.3% in SM Retail, 45.3% in BDO Unibank, 49.7% in SM Prime Holdings, and 22.5% in Chinabank. SM is considered the market leader in Philippine retailing given that it has the largest footprint of 3.3 million square meters (sq m) of gross selling area. BDO and Chinabank are considered the top 1 and 5 biggest banks, respectively, in terms of total assets.
FEATURED BOND
The Bond Spotlight
The Bond Spotlight
SM Investments Corporation
- Bond: SMPM 5.375 29
- Credit Rating: Unrated
Our View
SM Investments Corporation (SMIC) is a leading Philippine conglomerate with strong operations in retail, property, and banking. The company has demonstrated consistent revenue growth and solid profitability, reflecting its resilience and market dominance. With a well-managed debt position and stable financial performance, SMIC presents a reliable option for bond investors seeking security and steady returns.
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OUR TOP PICKS
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