IFR International - 21.07.2018

&RIDAY ûWITHûSMALLERûINCREASESûSEENûALONGû
THEûCURVE
4HEûTHREE
YEARûHASûCLIMBEDûFROMûûTOû
ûINûTHATûTIMEûWHILEûTHEûlVE
YEARûANDû
YEARûBASISûSWAPûLEVELSûHAVEûMOVEDûUPûFROMû
ûANDûûTOûûANDû û
RESPECTIVELY
h4HEûmATûANDûELEVATEDûCROSS
CURRENCYûBASISû
SWAPûCURVEûCANûONLYûENCOURAGEûOFFSHOREû53
DOLLARûFUNDEDûlRMSûTOûRAISEûFUNDSûINû!USSIEû
DOLLARSûANDûSWAPûTHEMûBACKûINTOû53ûDOLLARSû
ATûLEVELSûUPûTOûBPûCHEAPERûTHANûTHEYûWEREû
AûFEWûMONTHSûAGO vûSAIDûONEû3YDNEY
BASEDû
SYNDICATIONûBANKER
!UGUSTûHASûOFTENûBEENûAûFRUITFULûMONTHû
FORûCORPORATEû+ANGAROOûISSUANCE ûWHENû
MANYû%UROPEANûANDû53ûBANKERSûANDû
INVESTORSûAREûAWAYûFROMûTHEIRûDESKSûDURINGû
THEûNORTHERNûHEMISPHEREûSUMMERûHOLIDAY
,ASTû!UGUSTûSAWû6ERIZONû#OMMUNICATIONSû
ISSUEûAû!BNû53BN û+ANGAROOûDEBUTû
ANDûGLOBALûBREWINGûGIANTû!NHEUSER
"USCHû
)N"EVûSELLûAû!BNûFOUR
TRANCHEûOFFERINGû
THROUGHûITSû!USTRALIANûFUNDINGûARM û&"'û
&INANCE
4HEûBIGGESTûCORPORATEûTRADEûINû!USTRALIAû
WASû!PPLESû!BNûINAUGURALû+ANGAROOû
PRINTûINû!UGUSTû

FIG

US DOLLARS

BANKS RAISE NEARLY US$30bn IN
BOND SUPPLY RUSH

"ANKSû
ûMAINLYû53
BASEDû
ûRULEDûTHEûROOSTûINû
THEûHIGH
GRADEûPRIMARYûMARKETSûLASTûWEEK û
RAISINGûNEARLYû53BNûINûCONDITIONSûTHATû
BROADLYûSUITEDûlNANCIALûSECTORûISSUERS
BANK OF AMERICA CORPûRAISEDûTHEûMOSTûOFûTHEû
LOTû
û53BNûVIAûAûTRIPLE
TRANCHEûOFFERINGû
COMPRISINGûSIX
YEARûNON
CALLûlVEû
lXED
TO
mOATERS û.#ûmOATERSûANDûûNON
CALLûûlXED
TO
mOATERSû
ûWHICHûEPITOMISEDû
ROBUSTûAPPETITEûFORûTHEûSECTOR
h"ANKûISSUERSûAREûOPPORTUNISTICûANDûAREû
ISSUINGûOFFûTHEûFRONTûFOOTûONûTHEûSTRENGTHûOFû
THEIRûFUNDAMENTALSûANDûPERCEIVEDûVALUEûINû
THEIRûNEW
ISSUEûLEVELSûAFTERûRECENTûWIDENINGû
OFûBANKûPAPERûSPREADS vûSAIDûONEûSENIORû
CREDITûANALYST
9EAR
TO
DATE ûHIGH
GRADE
RATEDûBANKûSECTORû
SPREADSûWEREûABOUTûBPûWIDERûASûOFû
7EDNESDAY ûACCORDINGûTOû)#%û"!-,ûDATAû
4HISûSTATISTICûMADEûTHEIRûNEWûBONDSûMOREû
APPEALINGûTOûINVESTORS
h4HEûBANKINGûSECTORûALSOûLOOKSûEVENT
RISK
FREEûANDûPOISEDûTOûBENElTûFROMûAûRISEûINû
INTERESTûRATESûANDûIMPROVEDûASSETûQUALITYû
COMPAREDûTOûTHEûCORPORATEûSECTOR ûWHICHûISû

LOOKINGûCHALLENGEDûAMIDSTûTHEûNOISEûABOUTûAû

TRADEûWARvûSAIDûTHEûANALYST

"ANKûOFû!MERICASûTRADEûANDûDEALSûFROMû

OTHERûBANKSûTHATûINCLUDEDûUS BANKûMITSUBISHI

UFJ FINANCIAL GROUPûCITIBANKûCITIGROUPûJP

MORGAN CHASEûM&T BANKûWELLS FARGOûANDû

BANQUE FEDERATIVE DU CREDIT MUTUELûALLûFOUNDû

DECENTûINVESTORûAPPETITEûTHATûENABLEDûTIGHTû

PRICINGûLEVELSûDESPITEûVOLATILITYûINûBROADERû

MARKETS

"ANKûOFû!MERICASûTHREEûTRANCHESûOFûBONDSû

FROMûITSûHOLDCOûPRICEDûWITHûJUSTûBP

BPûINû

NEW

ISSUEûCONCESSIONûAFTERûBEINGûTIGHTENEDû

BPûFROMû)04SûTOûPRICINGû4HEYûWEREûTRADINGû

UPûTOûBPûTIGHTERûINûTHEûSECONDARYûMARKETû

ONû4HURSDAY

4HEûSTRUCTUREûOFûlXED

TO

mOATINGûANDû

mOATING

RATEûNOTESûAPPEALEDûTOûINVESTORSû

INCLUDINGûTHOSEûLOOKINGûTOûCAPITALISEûONûAû

RISINGûINTERESTûRATEûENVIRONMENT

4HEûBONDSûALSOûFOUNDûWIDERûAPPEALû

FOLLOWINGûTHEûRELEASEûOFûTHEûBANKSûSECOND

QUARTERûRESULTSûWHEREûITûREPORTEDûREVENUEû

FROMû&)##ûROSEûûTOû53BNûWHILEûREVENUEû

FROMûEQUITYûTRADINGûROSEûûTOû53BN

OFF WITH A BANG

&INANCIALûBONDûSUPPLYûHADûBEENûWIDELYû

EXPECTEDûTOûDOMINATEûPROCEEDINGSûLASTû

WEEKûWITHûBANKSûFREEûFROMûSELF

IMPOSEDû

EARNINGSûBLACKOUTSûAFTERûRELEASINGûRESULTSû

!NDûINVESTORSûWAITINGûFORûITûWEREûNOTû

DISAPPOINTED

4HEûWEEKûBEGANûWITHûAûBANGûWITHûlVEû

BANKSûRAISINGû53BNûWITHOUTûMUCHû

FUSSûSETTINGûTHEûTONEûFORûTHEûSURGEûOFûSUPPLYû

THATûWASûTOûFOLLOW

4HEûDEALSûONû-ONDAYûFROMû#ITIGROUPû

#ITIBANKû"&#-û*0û-ORGANûANDû7ELLSû&ARGOû

WEREûONûAVERAGEûTWICEûCOVERED

!NDûTHEûBONDSûWEREûTRADINGûATûLEASTûBPû

TIGHTERûTHANûNEW

ISSUEûLEVELSûONû4UESDAYû

THUSûPROVIDINGûAûPERFECTûBACKDROPûFORû

-ITSUBISHIû5&*û&INANCIALû'ROUPûWHICHû

RAISEDû53BNûINûAûMULTI

PARTûISSUEûTHATû

WASûOVERûûTIMESûCOVERED

!SûISSUERSûBANKSûAREûlNDINGûCONDITIONSû

CONDUCIVEûBECAUSEûTHEYûAREûABLEûTOûREACHû

OUTûLONGERûTHANûUSUALûTHANKSûTOûWIDENINGû



YEARûSWAPûSPREADSûWHICHûMAKEûLONG

ENDûISSUANCEûMOREûCOMPELLINGûINûTERMSûOFû

COST

4UESDAYSûSIX

TRANCHEû3%#

REGISTEREDû

OFFERINGûFROMû-5&'ûCOMPRISEDûTHREE

YEARû

lXEDûANDû&2.SûTHATûWEREûEACHû53MûINû

SIZEûANDûPRICEDûATû4REASURIESûPLUSûBPûANDû

THREE

MONTHû,IBORûPLUSûBPûRESPECTIVELYû

Aû53BNûlVE

YEARûlXEDûNOTEûATû4REASURIESû

PLUSûBPûAû53MûlVE

YEARûmOATERûATû

,IBORûPLUSûBPûAû53MûTAPûOFûITSû

ûSûANDûAû53Mû

YEARû

BONDûTHATûPRICEDûATû4REASURIESûPLUSûBP

4HOSEûSENIORûUNSECUREDûNOTESûPRICEDûATû

SPREADSûWHICHûWEREûBPnBPûINSIDEû)04Sû

REmECTIVEûOFûDECENTûDEMANDû&INALûORDERû

BOOKSûWEREûABOUTû53BN

4HEû*APANESEûBANKSûOFFERINGûPAIDûNEW

ISSUEûCONCESSIONSûOFûAROUNDûBPûONûTHEû

THREEûANDûlVE

YEARûlXEDûPORTIONSûANDûABOUTû

BPûONûTHEû

YEARûTAPûANDû

YEARûlXEDû

TRANCHESûACCORDINGûTOû)&2ûCALCULATIONS

!FTERû"ANKûOFû!MERICASûSUCCESSûONû

7EDNESDAYû-4û"ANKûANDû53û"ANKûRAISEDûAû

TOTALûOFû53BNûISSUINGûTWOûANDûlVE

YEARû

BONDSûTHATûPRICEDûWITHûLITTLEûTOûNOûNEW

ISSUEû

CONCESSION

53û"ANKSûTRANCHESûWEREûPRICEDûVERYûTIGHTû

WHICHûMEANTûTHEIRûBOOKûCOVERAGEûWASûBELOWû

TWOûTIMESûBUTû-4ûHADûAûPREMIUMûOFûABOUTû

BPûONûITSûlVE

YEARûlXEDûANDûITSûBOOKSûWEREû

ûTIMESûCOVERED

EUROS

SMFG REVIVES EURO SENIOR

TWO MONTHS ON

SUMITOMO MITSUI FINANCIAL GROUPûRESUSCITATEDû

THEûEUROûSENIORûBONDûITûMANDATEDûBACKûINû

-AYûHAVINGûSATûOUTûOFûTHEûRECENTûVOLATILITYûTOû

WAITûFORûAûBETTERûISSUANCEûWINDOW

BONDS FIG

ALL FINANCIAL INSTITUTION BONDS IN EUROS

BOOKRUNNERS: 1/1/2018 TO DATE

Managing No of Total Share

bank or group issues €(m) (%)

1 BNP Paribas 48 11,848.43 9.6

2 UBS 25 11,534.29 9.4

3 Deutsche Bank 38 9,062.35 7.4

4 SG 30 7,708.47 6.3

5 HSBC 41 7,624.21 6.2

6 Credit Agricole 24 6,772.87 5.5

7 Natixis 17 5,999.85 4.9

8 JP Morgan 29 5,262.45 4.3

9 Morgan Stanley 24 5,219.57 4.2

10 Citigroup 21 4,324.84 3.5

Total 195 123,041.72

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 JP Morgan 18 3,193.26 6.9

2 SG 9 3,106.55 6.7

3 BNP Paribas 15 3,087.74 6.7

4 HSBC 17 2,685.62 5.8

5 BAML 13 2,429.82 5.3

6 Morgan Stanley 14 2,334.61 5.1

7 UBS 12 2,295.96 5.0

8 Citigroup 14 2,271.01 4.9

9 Goldman Sachs 11 2,133.17 4.6

10 Deutsche Bank 11 1,948.36 4.2

Total 68 46,061.01

Source: Thomson Reuters SDC code: J3a