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CREDIT SUPPLY: BZLNZ Senior Unsecured: We See FV Around MS+85-90bp Area

CREDIT SUPPLY
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Bank of New Zealand (BZLNZ: A1/AA-/A+) is issuing senior unsecured and we see fair value around MS+85-90bp area.

  • BNZ is issuing EUR benchmark 5yr senior unsecured with IPT at MS+105bp area. Expected ratings are A1/AA-.
  • The bank only has one meaningful EUR unsecured in issue (BZLNZ 0.375% 09/14/24) and it’s not tapped this market in 5yrs now.
  • ANZNZ and WestPac are similarly-rated but the latter’s curve is all low-coupon/price issues so likely trading tight of where they’d otherwise be. The former only has one decent comparator which trades in line with Bank of America, so we’d see fair value for this around the BAC curve but with a small premium for being relatively unknown and a small issuer. So, we feel MS+85-90bp area to be fair.
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Bank of New Zealand (BZLNZ: A1/AA-/A+) is issuing senior unsecured and we see fair value around MS+85-90bp area.

  • BNZ is issuing EUR benchmark 5yr senior unsecured with IPT at MS+105bp area. Expected ratings are A1/AA-.
  • The bank only has one meaningful EUR unsecured in issue (BZLNZ 0.375% 09/14/24) and it’s not tapped this market in 5yrs now.
  • ANZNZ and WestPac are similarly-rated but the latter’s curve is all low-coupon/price issues so likely trading tight of where they’d otherwise be. The former only has one decent comparator which trades in line with Bank of America, so we’d see fair value for this around the BAC curve but with a small premium for being relatively unknown and a small issuer. So, we feel MS+85-90bp area to be fair.