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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.
FINANCIALS
Virgin Money (VMUK LN) is currently best performer in senior financials index - seems an unusually strong move, credit appears overbought.
- Nationwide and VM confirmed their takeover agreement this morning but this was a formality – the news was known on 7-Mar and the likelihood of deal failure appeared low, as highlighted by the equity not being a meaningful outperformer this morning.
- VM’s index constituents are 10bp tighter, against index 1bp tighter – NWIDE is performing in line with the index.
- The relative value call here is interesting (see graphic). VMUK (Baa1, BBB-) now trades very tight to BFCM in France (Baa1, BBB+) for a slightly weaker rating at the former. AIB (A3, BBB) is better rated, too and VMUK’s curve is now touching AIB’s. ING is one notch weaker rated at Moody’s (Baa2, BBB) and now well wide of VMUK’s curve. So VMUK does appear somewhat overbought.
- NWIDE, the acquirer, is only marginally better rated than its target (Baa1, BBB) so there’s no clear evidence of a meaningful improvement in underlying credit from the deal.
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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