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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
BNP (BNP: Baa1/A-/A+) is following ING’s successful Tier 2 issue yesterday with one of its own. We see BPCE as the best comparator so fair value appears around MS+170-180bp region, in our view.
- BNP is issuing benchmark 10NC5 Tier 2 sub debt with IPT at MS+200-205bp area. Expected ratings are: Baa2/BBB+/A-.
- BNP’s recent results (24-Jul) showed solid credit stats and a pre-tax beat, so pretty good overall. The bank is also buying AXA IM for EUR5.4bn which, whilst a near-term CET1 hit, is a good deal for a relatively low risk business which is also strategically sensible.
- BNP’s existing T2 curve has a couple of older, low coupon issues (BNP 0.875% at 4yrs to workout and BNP 1.625% at 6.9yrs) which is dragging its curve lower. Its more recent issues (in 2.5yrs workout region) trade tight with BPCE, as does its senior preferred curve (first graphic). So, plotting between BPCE 5.75% and 5.125% (at 3.8 and 5.4yrs) puts our fair value around MS+170-180bp region (second graphic).
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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