inside respective 65bp area and 100bp area
initial price thoughts. A US$500m three-year
mOATING
RATEûNOTEûWASûPRINTEDûATûTHREE
month Libor plus 34bp.
The Aussie major bank took advantage of
THEûPOSITIVEûMARKETûBACKDROPûANDûmATû53û
yield curve to lock in low rates and extend its
MATURITYûPROlLEûWITHûAûLARGEû
YEARûPRINT
Bank of America Merrill Lynch, Goldman Sachs,
Morgan Stanley and the issuer’s own
syndication desk were joint bookrunners on
the trade, which drew a combined order
book of US$5bn.
The three-year and 10-year notes paid 4bp
new issue concessions versus Westpac’s 2.70%
!UGUSTûS ûWHILEûTHEûTHREE
YEARûlXEDûCAMEû
1bp tighter than National Australia Bank’s
53bp Treasury spread for its US$900m 2.50%
three-year issued on January 8.
ANZ NZ SELLS TIGHT YANKEESANZ BANK NEW ZEALAND (A1/AA–/AA–) took
advantage of near-perfect market conditions
to raise US$1bn from last Tuesday’s dual-
tranche 144A/Reg S senior unsecured notes
through joint bookrunners ANZ, Citigroup, JP
Morgan and RBC Capital Markets.
The issue was more than three times
covered with a US$3.6bn combined order
book, enabling the leads to sell the
US$500m 2.75% three-year and US$500m
3.45% 10-year bonds at 63bp and 95bp over
Treasuries, well below the respective 75bp
area and 110bp area initial price thoughts.
The three-year note paid a modest 3bp
new issue concession, with the 10-year
COMINGûmATûTOûTHEûISSUERSû53ûDOLLARûCURVE û
using its 3.45% July 17 2027 paper as a
comparable.
Pricing was also notably tight versus
Australia’s Aa3/AA–/AA– rated major banks.
ANZ New Zealand’s three-year margin
was 10bp wide of the 53bp spread National
Australia Bank paid the previous week,
while the 10-year came 5bp back of where a
new Aussie major 10-year would price,
according to a banker on the deal.
h&OURûTOûlVEûYEARSûAGO ûTHEû+IWIûMAJORSû
typically priced about 20bp–25bp wide of
their Australian parents across the US
curve,” he said.EUROS
BNPP OFFERS FLOATER IN FRENCH
FUNDING FLURRYBNP PARIBAS and SOCIETE GENERALE squeezed in
a combined €1.75bn of senior non-preferred
funding before entering close periods ahead
of their full-year results.
French banks have made a strong start in
2018, taking advantage of the attractive
backdrop to issue a combined €9bn in the
euro senior and covered sectors.
BPCE will add to that total, last Friday
announcing a dual-tranche senior non-
preferred trade comprising sixes and
10s(Baa3/BBB+/A) via sole bookrunner Natixis.
It was BNPP’s second trip to the euro SNP
market in 2018, though it switched to an
FRN format for last Tuesday’s opportunistic
trade after selling a €1.25bn long eight-year
on January 4.
)TûPRICEDûAûõMûlVE
YEARû"AA!
! ! û
at three-month Euribor plus 33bp on booksALL FINANCIAL INSTITUTION BONDS IN EUROS
BOOKRUNNERS: 1/1/2018 TO DATE
Managing No of Total Share
bank or group issues €(m) (%)
1 UBS 6 4,025.25 24.9
2 BNP Paribas 4 2,242.07 13.9
3 SG 6 2,008.51 12.4
4 Lloyds Bank 1 1,493.59 9.2
5 UniCredit 3 648.59 4.0
6 NatWest Markets 2 622.30 3.8
7 HSBC 3 506.17 3.1
8 Santander 2 498.59 3.1
9 JP Morgan 3 456.17 2.8
10 Citigroup 3 411.88 2.5
Total 20 16,175.46
Including banks, insurance companies and finance companies. Excluding
equity-related and covered bonds. Excluding publicly owned institutions.
Source: Thomson Reuters SDC code: N11
ALL SUBORDINATED FINANCIAL INSTITUTION
BONDS (ALL CURRENCIES)
BOOKRUNNERS: 1/1/2018 TO DATE
Managing No of Total Share
bank or group issues US$(m) (%)
1 UBS 4 842.94 15.0
2 Goldman Sachs 3 741.40 13.2
3 BAML 3 677.67 12.0
4 BNP Paribas 2 548.76 9.7
5 JP Morgan 2 377.67 6.7
6 CBA 1 312.50 5.6
=6 Citigroup 1 312.50 5.6
8 Lloyds Bank 1 300.00 5.3
9 Deutsche Bank 2 256.53 4.6
10 BBVA 1 248.76 4.4
Total 7 5,630.33Source: Thomson Reuters SDC code: J3aArkea bonds widen on
‘inevitable’ divorce from group
FINANCIALS Market on watch for ratings agency reactionCREDIT MUTUEL ARKEA’s bonds shot wider in
secondary last week on fears that its separation
from Groupe Credit Mutuel is looking
increasingly likely.
CM Arkea has been trying to extricate itself
from the French mutual banking group for years,
but its response to a new ruling by a court last
week appears to have added fresh fuel to the fire.
CM Arkea’s €500m 1.875% 2029NC2024 Tier
2 sprang 18bp wider last Wednesday to swaps
plus 134.7bp, according to Thomson Reuters, but
had tightened to 126bp by Friday.
The Paris Court of Appeal confirmed last
Wednesday that the Credit Mutuel group cannot
become a cooperative society unless the switch
is agreed upon unanimously by its members,
including CM Arkea.
CM Arkea, which had questioned the regularity
of the group’s centralising approach, welcomed
that decision, adding in a statement that it
“confirms that the separation of the two groups
is now inevitable”.
Analysts view the potential break-up of
Groupe Credit Mutuel as a credit negative for its
underlying entities, and CM Arkea in particular.
That is because the ratings of the group and
its core members, including CM Arkea, benefit
from a solidarity mechanism, with each entity
required to provide financial support to theothers. That support is factored into their ratings,
and therefore the departure of one member
could drag those down.
“This has been rumbling on for a few years,”
said an investor. “The bonds have widened and
people are now waiting for the ratings agencies
to come out and put it on negative outlook, given
the risks around it. The news flow is definitely
heading in a direction of a split.”
At S&P, for example, Groupe Credit Mutuel
benefits from a one-notch adjustment to its
anchor rating for its ‘strong’ business position,
which extends to all its core subsidiaries, Bank of
America Merrill Lynch analysts pointed out.
“If Credit Mutual Arkea, whose total assets
amount to around €120bn, were to withdraw
from the group, it would no longer benefit from
its size and diversification, with a negative rating
impact largely unavoidable, in our view,” they
wrote in a note.
The ratings of the remainder of the group
and its other core subsidiaries, such as Banque
Federative du Credit Mutuel, would arguably be
under less pressure, they added, but they noted
CM Arkea is not an insignificant part of it.
BFCM’s €500m 1.625% Tier 2 due 2027
widened around 4bp to 86bp over swaps last
Wednesday, but had rallied to 83bp by Friday.
Alice Gledhill