BoA: Comments Unhelpful For US CRE-exposed Issuers

Bank of America (BAC US) management comments on BBG TV are relatively muted for spreads, especially what he didn’t say about CRE (negative for Aareal, DePfa, NYCB etc), we feel.

*COMMERCIAL REAL ESTATE `IS A SLOW BURN': BOFA'S MOYNIHAN
*INVESTMENT BANKING STABILIZED, DEALS NEED TO REBOUND: MOYNIHAN
*BOFA'S MOYNIHAN SAYS QUARTER STARTED OFF WELL IN TRADING
*BOFA'S MOYNIHAN: ECONOMY STILL ADJUSTING TO HIGHER RATES

*BOFA'S SUBRAMANIAN SAYS RISKS SITTING OUTSIDE PUBLIC MARKET

• CRE comments are interesting in that he’s effectively hedging his bets. What’s interesting is what he’s not saying – that being the CRE losses are limited, quality is improving, we’re at/nearing the bottom, and so on. This is not ideal for DePfa, Aareal, NYCB and so forth.
• IB only “stabilised” implies the hoped-for resurgence of deals is failing to show at this stage. This isn’t great for all the IB peers but the credit implications are relatively limited.
• Finally, comments around “public market” shares our view that stress signals are likely to be seen more in private markets, especially private credit including structured, in our view. Partners Group results this morning showed few signs of this but certainly something to watch for.