研究报告全文：FixedIncomeCreditCommentary15February2023CMBICreditCommentaryHKcorpsPreferperpsforyieldpick-upExecutiveSummaryGlennKoCFA高志和85236576235HKcorpshaveperformedwellsinceNov22inlinewiththesharpreboundoftheglennkocmbicomhkmarketLikepeersinotherspacetheconvictionofHKcorpsisloweratcurrentvaluationNonethelesswestillseevalueinselectedHKperpsofwhichcouponCyrenaNgCPA吳蒨瑩willberesetandorstep-upuponthefirstcalldatesandissuerscanaccess85239000801variousfundingchannelsWeconsidersthoseissuerswillbestronglycyrenangcmbicomhkincentivizedandhavetheabilitytocalltheirperpstocontrolfundingcostsTheseperpsnotonlyoffergoodcarrybutalsoofferdecentyieldpick-upovertheirJerryWang王世超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