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Raiffeisen Sr Pref Issue: We See Fair Value MS+130-140bp Area (Wide Interval)

CREDIT SUPPLY

Raiffeisen Bank (RBIAV: A1) is issuing senior preferred – this is a high risk situation with a step-change in underlying credit fundamentals ongoing (see below) so we have a very wide confidence interval. We see fair value at MS+130-140bp area. Books are already reported above EUR1bn (ex-JLMs).


  • Raiffeisen Bank is issuing EUR500m (WNG) 6NC5 senior preferred with IPT at MS+190bp area. Expected rating is A1 (Moody’s).
  • The obvious story with the issuer is the failure of its deals to sell its businesses in Russia and Belarus, which comprise around half of group profits. Guidance is for a new CET1 (ex-these countries) of 14.6% (from 17.3% last reported) along with pre-tax profits 15-25% lower than previously. Much of this is already captured in RBIAV spreads which are as much as 100bp wider (Tier 2) than comparable peers already.
  • The bank did issue green senior preferred last week out of its Hungarian entity (RABHUG 5.15% 05/23/30: EUR300m 6NC5) which came at MS+225bp for Baa3 and is now streaming around +216bp. Arion isn’t a great comp (fundamentally) but shows a c.20bp per year term structure (at A3) – using that would infer MS+135bp (based on the RBIAV5.75).
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