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Unicaja Banco T2 Issue: We See FV MS+260a

FINANCIALS

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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