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PTSB Issue Inline With FV: High Demand, Still No Greenium

FINANCIALS

Permanent TSB priced in line with fair value - another high demand issue without a greenium.

  • PTSB has set terms at MS+160bp for its senior unsecured green bond. We earlier saw fair value at MS+155-160bp (see graphic). Books were above EUR2.6bn, so 5.2x covered which is evidence of relatively strong demand, we feel. Average cover last week was 3.8x, the second highest of the year.
  • Two points: firstly, this has priced 1bp wide of the PTSB 6.625% (shorter workout) so this is relatively tight but a good premium to the BACR 4.918 which is a notch better-rated. Primary, even for a smaller issuer with less of a record, is still relatively accommodative right now.
  • Secondly, the lack of any meaningful greenium. We slightly hedged our bets on our fair value as this could, feasibly, have attracted a premium bringing it under +160bp. Even with this demand backdrop, evidently there was buyer pushback. We are yet to see any meaningful greenium in the financials primary we’ve monitored closely this year.

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Permanent TSB priced in line with fair value - another high demand issue without a greenium.

  • PTSB has set terms at MS+160bp for its senior unsecured green bond. We earlier saw fair value at MS+155-160bp (see graphic). Books were above EUR2.6bn, so 5.2x covered which is evidence of relatively strong demand, we feel. Average cover last week was 3.8x, the second highest of the year.
  • Two points: firstly, this has priced 1bp wide of the PTSB 6.625% (shorter workout) so this is relatively tight but a good premium to the BACR 4.918 which is a notch better-rated. Primary, even for a smaller issuer with less of a record, is still relatively accommodative right now.
  • Secondly, the lack of any meaningful greenium. We slightly hedged our bets on our fair value as this could, feasibly, have attracted a premium bringing it under +160bp. Even with this demand backdrop, evidently there was buyer pushback. We are yet to see any meaningful greenium in the financials primary we’ve monitored closely this year.