FIG SNAPSHOT: Wells Fargo make euro comeback

Monday's session is set to deliver a portion of the week's anticipated supply via an opportunistic two-part sale from Wells Fargo following the release of Q2 results on Friday.

While seasonal factors and earning blackouts mean supply is unlikely to get near levels seen last week, the market is expected to remain open for business this week though where respondents in our survey conducted on Friday predicted, on average, that EUR4bn of non-covered paper would price this week.

That comes after last week surprised to the upside where EUR8.05bn was raised via thirteen lines, over double the average EUR4.0bn estimate and above even the most optimistic EUR6bn guess.

Boding well for anyone still looking to lock in some pre-holiday funding, chasing those deals were very hefty final orders worth EUR28.3bn, which were as high as EUR35.0bn before issuers cut pricing by an average of 30.9bps with a couple pricing their deals inside the estimated fair value level.

The two most oversubscribed deals of the week were also at the higher beta end of the spectrum with Banco BPM's EUR400m PNC7 AT1 landing 62.5bps inside IPTs into a 7.13x book. Also standing out was Piraeus Bank's EUR650m 5NC4 green senior pref on a 6.31x book which priced 37.5bps inside its 5%a starting point.

Away from primary, thoughts remain on earnings where Tuesday will see Bank of America and Morgan Stanley close out the current cycle of major US bank earnings.

A further seven members of the Stoxx Banks index report over the week comprising SEB, Swedbank (Tue), Svenska Handelsbanken (Wed), Bankinter (Thu) and Danske Bank (Fri).

Wells Fargo & Company end lengthy absence from euro market with two-part senior

** Wells Fargo & Company, rated A1 / BBB+ / A+ / AA (low) by Moody's / S&P / Fitch / DBRS, has mandated BBVA, HSBC, ING, IMI-Intesa Sanpaolo, Natixis, Societe Generale, Swedbank and Wells Fargo Securities (B&D) as Joint Bookrunners for a EUR Benchmark 4NC3 FRN due 22 July 2028 (First Issuer call on 22 July 2027, Par Call: 1 month(s) prior to maturity, Tax Redemption Call, Coupon: 3mEURIBOR+[ ]bps per annum floating rate, payable quarterly in arrear and accruing from, and including, the Settlement Date to, but excluding, the Maturity Date.) and a 8NC7 Fxd-to-FRN due 22 July 2032 (First Issuer call on 22 July 2031, Par Call: 1 month(s) prior to maturity, Make Whole Call: from and including 29 July 2025 to but excluding 22 July 2031, Tax Redemption Call, Coupon: [ ]% per annum fixed rate, payable annually in arrear and accruing from, and including, the Settlement Date to, but excluding, the Fixed Rate End Date.), dual tranche Senior, direct, general, unconditional, unsubordinated and unsecured obligations of the Issuer, Registered, NSS, RegS only issue, expected ratings A1 / BBB+ / A+ / AA (low) by Moody s / S&P / Fitch / DBRS. Pay date 22 July.

4NC3 FRN @ 3mE+70 from 3mE+95 bps area. Book 1.9bn+

8NC7 Fxd-to-FRN @ m/s+118 from MS+145 bps area. Book 3.8bn+

- WFC last hit the public euro market way back in April 2020 via a EUR3bn 2-part offering of 5NC4 and 10NC9 fixed-to-floating notes. The last US bank to hit the euro market, meanwhile, was JP Morgan on 3rd June when it priced EUR500m and EUR1.25bn 4NC3 FRN and FIX-to-FRN lines into respective books of EUR1.3bn & EUR2.3bn.

- In terms of r.v., the varied nature of comp curves (below) leaves fair value open to a degree of subjectivity although bankers on and off the deal were seeing the theoretical level on the 8NC7 line anywhere between the m/s+105 and m/s +110 level. With the 8NC7 line ramped in to a reoffer level of m/s +118, that suggests a landing NIC in the region of 8-13bps.

New to the pipeline

** Hamburg Commercial Bank AG, rated A3 (Stable) by Moody's, has mandated Citi, Deutsche Bank, Goldman Sachs Bank Europe SE, Jefferies and Natixis as Joint Lead Managers for its upcoming 4-year 500m (WNG) fixed-rate Senior Non-Preferred offering. The transaction will be in Reg S Bearer format, and is expected to be rated Baa2 by Moody's. The transaction is expected to be launched in the near future, subject to market conditions. Comps here

Hamburg Commercial Bank AG (the Offeror ) has also announced today an any-and-all tender offer on its 500m 6.250% Notes due 18 November 2024 (ISIN: DE000HCB0BQ0), made on the terms, and subject to the offer restrictions and conditions, contained in a tender offer memorandum dated 15 July 2024 (the Tender Offer Memorandum ). The tender offer will expire on 22 July 2024. Holders are advised to carefully read the Tender Offer Memorandum for full details of, and information on the procedures for participating in, the tender offers. Citi and Deutsche Bank are acting as Dealer Managers on the tender offer. Details here.

Performance tracker of recent EUR benchmark deals

---- Subscribe to read more ----

To receive this analysis plus much more, subscribe to IGM. Request your free demo of the service today.