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CREDIT SUPPLY: NWIDE GBP AT1 Issue: We See FV Around 7.5% Yield Area

CREDIT SUPPLY
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Nationwide (NWIDE: A1/A+/A+) is issuing GBP AT1 today, we see fair value around 7.5% yield area.

  • Nationwide is issuing GBP benchmark PerpBC 6/2031 fixed AT1 with IPT at 8% area. Expected ratings are Baa3/BB+/BBB-.
  • This is a 6.8yr issue, so, using a swap rate of 3.58% gives an IPT of MS+442bp. NWIDE 7.859% Perp is a 2000-issue with a tiny outstanding (GBP38m) so we’re happy to disregard, similarly the NWIDE 5.769% at 1.4yrs. The NWIDE 5.75% at 3.3yrs trades tight with similarly rated Lloyds, so we can see fair value being around MS+390bp area, or 7.5% yield area.
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Nationwide (NWIDE: A1/A+/A+) is issuing GBP AT1 today, we see fair value around 7.5% yield area.

  • Nationwide is issuing GBP benchmark PerpBC 6/2031 fixed AT1 with IPT at 8% area. Expected ratings are Baa3/BB+/BBB-.
  • This is a 6.8yr issue, so, using a swap rate of 3.58% gives an IPT of MS+442bp. NWIDE 7.859% Perp is a 2000-issue with a tiny outstanding (GBP38m) so we’re happy to disregard, similarly the NWIDE 5.769% at 1.4yrs. The NWIDE 5.75% at 3.3yrs trades tight with similarly rated Lloyds, so we can see fair value being around MS+390bp area, or 7.5% yield area.