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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.
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ING (INTNED: Baa1 pos/A-/A+) issuing USD AT1 today; we see fair value around 7.5% yield area.
- ING is issuing USD benchmark PerpNC10 AT1 fixed sub debt with IPT at 7.875% yield area. Expected ratings are Ba1/BBB. Books are already above USD3bn.
- Using 10yr swap rate of 3.31%, IPT translates to MS+457bp. ING’s curve includes a couple of older issues (INTNED 4.25% and 4.875% Perps) which have older structures and lower resets (5yr Treasury +286bp and +350bp). It does have some more modern issues (e.g. INTNED 8% Perp) which is a better indicator with very different reset (5Y SOFR +436bp).
- ING is similarly rated to SANTAN which has an adjacent issue (SANTAN 8% Perp) at a slightly shorter workout. As the UBS (better rated) curve also shows, these curves really flatten out beyond 5-7yrs. We feel that SANTAN issue is a better comp, even though the INTNED 8% does trade tight with UBS (scarcity value?), so we see fair value around MS+420bp area, which translates back to around 7.5% area.
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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