IFR International - 20.10.2018

CONVICTIONûIS vûSAIDûAûSECONDûBANKERûh4HATSû
WHEREûYOURûCLEARINGûPRICEûISv
4HEûPERSISTENTûVOLATILITYûISûALSOûGIVINGûRISEû
TOûAûWIDEûRANGEûOFûVIEWSûONûPRICINGûAMONGû
SYNDICATESûFORûRECENTûDEALSû!NDûWHILEûSOMEû
BORROWERSûAREûHAPPYûTOûTAKEûAûCONSERVATIVEû
APPROACHûnû#AIXA"ANK ûFORûEXAMPLE ûOFFEREDû
AûBPû.)0ûATû)04SûONûLASTû7EDNESDAYSûõBNû
lVE
YEARû3.0ûnûOTHERSûAREûLOATHûTOûDOûSOûTOû
AVOIDûPRICINGûWIDERûTHANûTHEYûHADûHOPED û
SHOULDûORDERSûDISAPPOINT
)TûISûWORTHûPOINTINGûOUTûTHATû!EGONûISû
UNDERûNOûPRESSUREûTOûISSUEû7HILEûITûHASû
SOMEûõBNûOFûGRANDFATHEREDû4IERûûANDû
4IERûûSECURITIESûITûHOPESûTOûRElNANCE ûITûHASû
UNTILûûTOûDOûSOû!FTERûTHAT ûTHEûSECURITIESû
WOULDûBEûTREATEDûASûLIABILITIES
"UTûTHEûDECISIONûTOûWAITûFORûBETTERûPRICINGû
HASûCOMEûATûAûCOSTûFORûOTHERSû)TALYSû"ANCAû
#ARIGEûISûPERHAPSûTHEûBESTûEXAMPLEûnûITû
POSTPONEDûAû4IERûûTRADEûINû-ARCHû#AAn
### ûAFTERûTHEûPRICEûPROVEDûTOOûHIGHûTOû
SWALLOW ûANDûISûNOWûINûEFFECTûLOCKEDûOUT
/THERûBANKSûAREûSAIDûTOûHAVEûBEENûWAITINGû
TOûANNOUNCEû!4ûDEALSûFORûNINEûMONTHSûORû
EVENûLONGER ûUNDERLININGûTHEûRISKûTHATû
lXATINGûONûAûYIELDûTARGETûMAYûTHWARTû
ISSUANCEûENTIRELYû!USTRIANûNATIONALû
CHAMPIONû%RSTEû'ROUPû"ANKûHASûYETûTOûBRINGû
THEû0.#ûITûANNOUNCEDûINû-AY ûWHENûITû
DEEMEDûTHEûPOTENTIALûPRICEûUNATTRACTIVE
"UTûAFTERûTWOûQUARTERSûWHEREûGOODûDAYSû
HAVEûBEENûFEWûANDûFARûBETWEEN ûBORROWERSû
AREûlNALLYûWISINGûUP ûTHEûlRSTûBANKERûSAID
h)SSUERSûAREûGETTINGûUSEDûTOûTHATûREALITY û
WHICHûMEANSûWHENEVERû;THEûMARKET=û
STABILISESûANDûFEELSûOKAY ûYOUREûDElNITELYû
GOINGûTOûSEEûPEOPLEûJUMPINGûFORWARDûYOUû
HAVEûNOûCHOICEv

NON-CORE CURRENCIES

BFCM EXTENDS FRENCH SUPPLY
IN AUSTRALIA

BANQUE FEDERATIVE DU CREDIT MUTUEL ûRATEDû
!A!! ûBECAMEûTHEûFOURTHû&RENCHûBANKûTOû
ISSUEû!USTRALIANûDOLLARûBONDSûTHISûYEARûWITHû
LASTû4UESDAYSû!Mû53M ûDEBUTû
+ANGAROOûSALEûOFûlVE
YEARûmOATING
RATEû
SENIORûPREFERREDûNOTES
4HEûOFFERINGûUNDERû"&#-Sû%-4.û
PROGRAMME ûVIAûJOINTûLEADûMANAGERSûHSBC
ANDûNAB ûWASûPRICEDûATûPAR ûINûLINEûWITHû
THREE
MONTHû""37ûPLUSûBPûAREAû
GUIDANCE
/Nû/CTOBERû û".0û0ARIBASûISSUEDû!Mû
OFû
YEARûNON
CALLûû4IERûû%UROBONDSûATû
MID
SWAPSûPLUSûBP
/Nû3EPTEMBERû û3OCIETEû'ENERALEûSOLDû
!MûOFûû
YEARûSENIORûNON
PREFERREDû%UROBONDSûALONGSIDEûAû!Mû
lVE
YEARûNON
PREFERREDûTRANCHE

/Nû!PRILûû"0#%ûPRINTEDû!MûOFû

SENIORûNON

PREFERREDû

YEARû+ANGAROOSûINû

TANDEMûWITHûAû!MûlVE

YEARûSENIORû

PREFERREDû+ANGAROOûOFFERING

COVERED BONDS

EUROS

SANTANDER MAKES SHAKY RETURN

TO COVEREDS

BANCO SANTANDERSûlRSTûEUROûCOVEREDûBONDû

SINCEû*ANUARYûûMETûWITHûLOWERûTHANû

EXPECTEDûDEMANDûASûAû3PANISHûCOURTûRULINGû

HITûITSûBANKINGûSECTORûBUTûTHEûNATIONALû

CHAMPIONûMANAGEDûTOûPRICEûAûõBNûDEALû

WHEREûOTHERûINSTITUTIONSûMAYûHAVEûFAILEDûAû

LEADûSAID

7HILEû3ANTANDERûWASûINûTHEûMARKETûLASTû

4HURSDAYû3PAINSû3UPREMEû#OURTûRULEDûTHATû

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CERTAINûTAXESûRELATEDûTOûMORTGAGEûLOANSû

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MILLIONSûOFûEUROSûINûCOMPENSATION

4HATûPROMPTEDûAûSELL

OFFûINû3PANISHû

SECURITIESûnû!4ûPAPERûDROPPEDûUPûTOûû

POINTSûFORûEXAMPLEûWHILEûAûõBNûû

/CTOBERûû3.0ûTHATû#AIXA"ANKûSOLDûLASTû

7EDNESDAYûATûONEûPOINTûWIDENEDûBPûTOû

BPûOVERûSWAPSûACCORDINGûTOû4RADEWEB

h)TûCLEARLYûDERAILEDûTHEû3PANISHûCOMPLEXû

ACROSSûTHEûBOARDûxûSOûITûWASûAûBITûOFûAûDOWN

DAYûONûTHEûBACKûOFûTHATûNEWSvûSAIDûAûLEADû

MANAGER

h4HEûBROADERûMARKETûISûCLEARLYûALSOûTRICKYû

ASûWEûJUSTûSAWûANû2#)û"ANQUEûDEALûPULLEDûASû

WELLvû2#)ûHADûHOPEDûTOûSELLûAûSTERLINGûlVE

YEARûSENIOR

,EADSûCredit Suisse, Natixis, Santander and

UniCredit BEGANûMARKETINGûTHEû

YEARû

!An!!   ûATûGUIDANCEûOFûBPûOVERûSWAPSû

AREAû4HEûSPREADûWASûEVENTUALLYûlXEDûATû

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h4HEûFACTûTHATû3ANTANDERûGOTûTHISûDEALû

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NAMEûANDûTHEûFACTûTHEYûHAVENTûBEENûINûTHEû

MARKETûFORûAûLONGûTIMEvûSAIDûTHEûLEAD

h/NûAûDAYûLIKEûTODAYûIFûITûWASûANYûOTHERû

3PANISHûBANKû)MûPRETTYûSUREûITûWOULDûHAVEû

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ANDûAûSTRONGûNAMEûTHEYûWEREûSTILLûABLEûTOû

HOLDûTHEûBOOKûTOGETHERv

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MARKETûCONDITIONSû"UTûSOMEûHADûEXPECTEDû

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3ANTANDERûSUPPLYûANDû3PANISHûCOVEREDûBONDû

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COVEREDûISSUEDûOUTûOFû3PAINûINûTHEûYEARûTO

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ELIGIBLEû

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YEARû

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FAIR VALUE OBSCURED

"ANKERSûAWAYûFROMûTHEûDEALûADDEDûTHATû

DEMANDûMAYûHAVEûBEENûLIMITEDûDUEûTOûTHEû

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YEARûMATURITYûnûWITHûlVE

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CURRENTLYûSEENûASûTHEûSWEET

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DIFlCULTûPRICEûDISCOVERYûPROCESS

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ATûBPnBPûMIDû4HEûISSUERSûCURVEûHOWEVERû

ISûRELATIVELYûILLIQUIDûGIVENûTHEûLACKûOFûRECENTû

SUPPLYûCALLINGûINTOûQUESTIONûTHEûRELEVANCEû

OFûTHOSEûLEVELS

4EN

YEARûPAPERûFROMû#AIXA"ANKûANDû

"ANKINTERûSOLDûEARLIERûTHISûYEARûWASûSPOTTEDû

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SHOULDûPRICEûBPnBPûINSIDEûTHESEûNAMESû

IMPLYINGûFAIRûVALUEûINûTHEûMID

TO

HIGHûTEENSû

/NûTHATûBASISûONEûSAIDûTHEûSTARTINGûPOINTû

WASûTOOûTIGHTûGIVENûTHEûCHALLENGINGûMARKETû

CONDITIONS

h3ANTANDERûISûAûGREATûBANKûBUTûNOWûISû

MAYBEûNOTûAûTIMEûWHENûYOUûCANûEXTRACTûTHEû

VALUEûOFûYOURûCREDITûINûAûPRIMARYûCOVEREDû

BONDûTRANSACTIONvûHEûSAID

/THERSûWHOûSAWûFAIRûVALUEûINûTHEûLOW

TO

MIDûTEENSûSAIDûTHEûSTARTINGûPOINTûSEEMEDû

FAIRû)TALIANûBANKSûPAIDûASûMUCHûASûBPûTOû

RAISEûCOVEREDûDEBTûINû*ULY

h4HEYREûNOTHINGûLIKEûTHEû)TALIANSûSOûTHEYû

SHOULDNTûBEûPAYINGûMOREûTHANûBPvûSAIDû

ANOTHERûBANKERûAWAYûFROMûTHEûDEAL

!NOTHERûBANKERûAWAYûSAIDûTHATûWITHOUTû

THEûBENElTûOFûHINDSIGHTûHEûWOULDûNOTû

NECESSARILYûHAVEûRECOMMENDEDûTHATû

3ANTANDERûSTARTûWIDER

!NYûOTHERû3PANISHûISSUERSûTHATûMAYûHAVEû

BEENûLOOKINGûFORûOPPORTUNITIESûINûTHEû

COVEREDûBONDûMARKETûWOULDûNOWûDOûWELLûTOû

HOLDûOFFûANDûSEEûHOWûTHEûTAXûNEWSûDEVELOPSû

SAIDûSYNDICATEûBANKERS

h&ORûAûDEALûOUTûOFû3PAINû)ûTHINKûPEOPLEû

WILLûTHINKûTWICEûAFTERûTHISûNEWSvûSAIDûONEû

h0EOPLEûWILLûNEEDûTOûTHINKûABOUTûWHATûTHISû

BONDS COVERED BONDS

ALL COVERED BONDS (ALL CURRENCIES)

BOOKRUNNERS: 1/1/2018 TO DATE

Managing No of Total Share

bank or group issues US$(m) (%)

1 HSBC 57 10,590.06 5.7

2 LBBW 63 10,537.20 5.7

3 Natixis 51 10,251.85 5.5

4 UniCredit 62 10,210.00 5.5

5 Commerzbank 59 9,666.01 5.2

6 Deutsche Bank 42 8,058.32 4.3

7 UBS 38 7,992.92 4.3

8 Credit Agricole 41 7,620.64 4.1

9 SG 38 7,265.33 3.9

10 Credit Suisse 35 6,997.73 3.8

Total 258 185,343.75

Source: Refinitiv SDC code: J15a