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Unicaja Banco T2 Issue: We See FV MS+260a
Unicaja Banco issuing Tier 2 – we see FV around MS+260bp.
- Unicaja is issuing EUR300m (WNG) on 10.25NC5.25 Tier 2 today with IPT at MS+310a.
- There are few comparables in sub-IG Tier 1 (Unicaja is Ba3/nr/BB) but just looking at term premia, both Sabadell (nr/BB+/BB) and BPM’s (Ba1/BB/nr) curves imply around 50bp of uplift for a little over two years of incremental term. This new issue is just under 2 years beyond the end of Unicaja’s curve so the 3.125 ’32 at MS+232bp with, say, 40bp of term premium, would bring us to the 270bp area.
- BPM has a similar duration benchmark bond but looks to be a notch or two better-rated than this issue (which is sub-benchmark), and streams at MS+229bp, so we’d need a good premium on that.
- The Sabadell 6 ’33 is similarly-rated, a year shorter-dated so using 20-25bp of term premium would get us to MS+255-260 area. Considering the strength of recent demand, fair value could be as tight as MS+260bp.
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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.