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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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Phoenix ((PHNXLN: BBB+) is issuing USD RT1 – we see fair value around 8.2% area with a very wide confidence interval – USD RT1s are rare and PHNX is a first-time issuer in this market, we believe.
- Phoenix is issuing USD500m (WNG) PerpNC6 RT1 debt today with IPT at 8.5% area. Books are already >EUR1bn (incl. JLMs). Expected rating is BBB+.
- Using a USD swap rate of 4.01% this gives a spread of MS+449bp. There are very few USD RT1s out there but the (unusual-shaped curve) would imply a fair value around MS+420bp.
- Looking at the EUR RT1 market, MS+420bp puts it slightly wide of AGSBB 3.875% (at around MS+400bp) but this is a very low cash price bond, so would, normally, trade wider). If anything, MS+420bp may be aggressive, especially for a first time USD RT1 issuer and a relatively small insurer. Another with a very wide confidence interval, in our view.
- MS+420bp equates back to 8.2% 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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