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MNI is the leading provider
of intelligence and analysis on the Global Fixed Income, Foreign Exchange and Energy markets. We use an innovative combination of real-time analysis, deep fundamental research and journalism to provide unique and actionable insights for traders and investors. Our "All signal, no noise" approach drives an intelligence service that is succinct and timely, which is highly regarded by our time constrained client base.Our Head Office is in London with offices in Chicago, Washington and Beijing, as well as an on the ground presence in other major financial centres across the world.
CREDIT SUPPLY
Aareal Bank (AARB: Baa3/BBB) is issuing a short 5yr covered bond – we see fair value around MS+50bp.
- Aareal is issuing EUR500m (WNG) short 5yr covered bond with guidance at MS+58bp area. Expected rating is Aaa.
- Aareal is obviously at the centre of fears around German CRE market, which the ECB has been flagging more recently, but this is a known risk now. The bank recently announced the bumper sale of its tech platform which is credit positive for the parent, in CET1 terms.
- Aareal trades wide of most of the German triple-A peers, due to its CRE risk, but tight of Hamburg Commercial and (lower-rated) DePfa. These two have relatively tight bonds in the 3.5yr region and this issue should be tight of those two – adding 3-4bp per year of term premium, we see fair value in the MS+50bp region.
Why MNI
MNI is the leading provider
of intelligence and analysis on the Global Fixed Income, Foreign Exchange and Energy markets. We use an innovative combination of real-time analysis, deep fundamental research and journalism to provide unique and actionable insights for traders and investors. Our "All signal, no noise" approach drives an intelligence service that is succinct and timely, which is highly regarded by our time constrained client base.Our Head Office is in London with offices in Chicago, Washington and Beijing, as well as an on the ground presence in other major financial centres across the world.
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