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FINANCIALS
Intesa EUR benchmark 6.5Y green bond issue with IPT at MS+145 area, we see fair value around MS+115bp.
- Both Intesa and Unicredit’s curves have a range of low coupon/low price bonds outstanding which does complicate this valuation a little. We prefer to focus on the immediate peers on ISPIM’s curve and the UCGIM 4% out at 10Y.
- Much as this bond is benchmark and green, there are three ISPIM bonds either side of this workout point which would imply a valuation as tight as, perhaps MS+105-110bp area. However, there the ISPIM 4.06% which is a social bond itself, EUR800m in size but a slightly lower coupon than its peers. As a result, we do think this fair value can be a little inside that social bond, around MS+115bp area.
- Much as this appears tight, especially relative to that social bond, the ISPIM 5.25% at 5.8yrs to workout (only 0.7yrs shorter) is at MS+96bp so, if anything, that’s a factor pulling us even tighter. This is also a bond with a social caveat. Either way, the first social bond (ISPIM 4.06%) does appear wide, on a relative value basis.
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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