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CREDIT SUPPLY: Credit Agricole Assurances T2; We See FV Around MS+195bp Area

CREDIT SUPPLY

Credit Agricole (ACAFP: A3/A-/A+) Assurances is issuing Tier 2 sub debt today; we see fair value around MS+195bp area.

  • ACAFP is issuing EUR benchmark long 10Y Tier 2 fixed sub debt with IPT at MS+235bp area. Expected rating is BBB+.
  • The Solvency II Tier 2 universe is still relatively thin, but ACAFP does have an adjacent bond (ACAFP 5.875% ‘33s) at 1.7yrs shorter workout, MS+188bp. CNP is similarly rated and a good comp, we feel – this trading a little wide of ACA at longer workouts. It shows about 3bp p.a. of extension so, using the ACA ‘33s, puts fair value around MS+195bp area, we feel.

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