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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.
CREDIT SUPPLY
Aareal Bank (AARB: Baa3/BBB) is issuing Tier 2 debt today, we see fair value at MS+310-330bp area, with a wide confidence interval reflective of the CRE risk in the issuer alongside its trading wide of much-lower rated peers in, for example, SNP ranks.
- Aareal is issuing EUR400m WNG 10.25NC5.25 Tier 2 fixed sub debt with IPT at MS+375bp area. Expected rating is BB+.
- Aareal has no meaningful Tier 2 lines outstanding, and few recent issues of size across other ranks. If we look at senior non-preferred, AARB has a 5.875% ’26 which trades around 30-40bp (30-40% relative) wide of the big three Greek banks (all lower rated, however) – this is the first chart.
- In Tier 2 world, the intercept at 5.25yrs for the Greeks, would be around MS+260-280bp area. If we add that nominal, we’d get MS+300-320bp area but we’d want a relative add-on, which likely brings fair value to around MS+310-330bp area, obviously with a wide confidence interval, however.
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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