FIG SNAPSHOT: Duo aiming to take advantage of residual demand

The new week is getting off to a steady start in the non-covered FIG space where two issuers are working opportunistic deals, both for pre-set sizes which total EUR1.15bn.

That will make a modest dent in this week’s expected single currency supply which bankers anticipate will total EUR5bn, according to our poll conducted last Friday. The highest estimate came in at EUR7bn.

If last week is any guide, meeting (or even exceeding) this week’s guess will not depend on finding sufficient demand, but rather on identifying issuers that are willing or able to take advantage of evidently high cash levels among the investor base.

In this respect, the numbers speak for themselves where the EUR7.05bn raised last week was supported by sensational demand which totalled EUR35.37bn with the week’s subordinated deals faring particularly well.

Strong demand seen for last week's deals handed issuers considerable pricing power too with NICs generally minimal or non-existent. For more detail on last week’s activity see IGM’s FIG WEEKLY

Banco de Sabadell repeating script with green SNP

** Banco de Sabadell, S.A., rated Baa2/BBB+/BBB/AL by Moody’s/S&P/Fitch/DBRS, has mandated Banco Sabadell, Crédit Agricole CIB, Goldman Sachs Bank Europe SE, Jefferies, Morgan Stanley, and UniCredit as joint lead managers and Crédit Agricole CIB as Green and Sustainable Structuring Advisor for a no-grow EUR500m issue of 6.5NC5.5 Green Senior Non-Preferred Notes due 27 May 2031. Pay date 27 November. Optional Redemption Date: 27 May 2030.

IPTs: MS+155bps area

• Today's sale marks a carbon copy of Sabadell's senior non-preferred trade in March which came via a EUR500m 6.5NC5.5 green line (4.25% 9/3-29) that was a hit with investors who submitted EUR3.5bn in final orders at the m/s +160 reoffer spread.
• Prior to that, the issuer visited the SNP market in August 2023 via a EUR750m 6NC5 (5.5% 9/29-28) which priced at m/s +240 into a EUR1.75bn book.
• Both lines were included in the comps list (below) and have performed well since launch, spotted at i+118 and i+120 respectively. That in turn would support a fair value estimate in the region of m/s low +120s which bankers on and off deal concurred with.
• The initial book update touted orders at over EUR1.5bn.

RBI returning to AT1 market

** Raiffeisen Bank International AG (Ticker: RBIAV), rated Moody's: A1 (stable) / S&P: A- (negative), has mandated BNP Paribas, Raiffeisen Bank International, UBS Investment Bank as Joint Structuring Advisors and BofA Securities, BNP Paribas, Citi, Crédit Agricole CIB, Raiffeisen Bank International, UBS Investment Bank as Joint Lead Managers for a EUR 650m (WNG) RegS Bearer, Perpetual Fixed to Reset Rate Additional Tier 1 Classical Global Note, exp rating BB (S&P). Pay date 25 November. Reset Dates 15 June 2030 (the "First Reset Date") and each 5th anniversary thereof.

IPTs 7.75% area (Coupon, semi-annually)

• Euro-denominated AT1 supply in 2024 is already at a record where last week’s deals from Deutsche Bank (EUR1.5bn PNC 3/32) and BPER Banca (EUR50m PNC 3/30) took the annual total to EUR19.4bn.
• Those deals also indicated the current depth of demand for AT1 paper where DB’s sale scooped a massive EUR10.5bn book while BPER’s trade was supported by orders of more than EUR3bn.
• Following that, the deals are performing well in secondary, seen bid around 101.20 and 101.0 respectively on Monday morning versus their par reoffer prices.
• RBI itself last sold subordinated paper in September via a LM driven EUR500m 10.25NC5.25 Tier 2 into a EUR2.25bn book which marked its successful return to the subordinated market having stood down an AT1 in March.
• The lender’s last actual sale of AT1 paper was held back in July 2020 via a EUR500m PNC 12/26 line.

Performance tracker of recent EUR benchmark deals

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