EM CEEMEA CREDIT: ABQKQD: Mandate with FV
Ahli Bank (ABQKQD; A2/-/-)
Mandate: new issue deal USD500mn WNG 5Y
FV @ z+105bp
- Qatari Ahli Bank (ABQ) has mandated banks to arrange investor calls, indicating a USD500mn WNG 5Y benchmark as a potential new issue deal. As ABQ has not issued in recent vintages, we use peer issuer DUKHAN’s recent deal from Oct ’24 for our historical anchor point to gain some perspective on how secondary market spreads have evolved in recent times (see chart below).
- We sketch our FV considerations based on the limited information available at this stage. In particular, we pick Doha Bank’s recent new deal from earlier in February this year as our anchor point. We see FV for the proposed new deal at z+105bp (approx. 4.875% yield or T+79bp), some 20bp inside DHBKQD 30s. Our feeds show DHBKQD (Baa1/-/A) 5.25 Mar30 charting at z+124bp, in line with the shorter dated 29s at z+123bp. Among other shorter dated 29s comparables, our feeds show QIBKQD (-/-/A) 4.485 Sep29 at z+104bp and QNBK (Aa2/A+/A+) 4.875 Jan29 at z+104bp.
Ahli Bank acts as a well-established, wholesale and retail bank focused on Qatar. The shareholding structure benefits from a stable, domestic backing, with the Qatar Investment Authority (and subsidiaries) holding some 47.71%. FY24 results confirm strong profitability (net profit +7% YoY at QAR891mn, NII +17% YoY at QAR1.64bn), solid asset quality (increasing NPLs but starting from a low base, with conservative coverage at 234%) and adequate capital position (CAR stable at 21.2%).
Want to read more?
Find more articles and bullets on these widgets:
Historical bullets
US TSYS: Yields Pull Back Again With Consumer Growth Story In Question
Treasuries outperformed global counterparts Friday, fully completing a reversal from a midweek selloff.
- A large miss in January retail sales (-0.9% M/M vs 0.7% prior, -0.2% consensus) represented the biggest sequential drop in 22 months, with a similarly weak "control group" figure leading to a 0.5pp downgrade to the Atlanta Fed's GDP nowcast (to 2.3% GDP growth in Q1, i.e. no acceleration from Q4).
- That was enough to see the 10Y Treasury yield drop 7bp in the subsequent half hour, continuing the downtrend seen beginning in the immediate aftermath of Wednesday's hot CPI release. 10Y yields dropped over 21bp from the Wednesday high to Thursday's low, ultimately ending a tumultuous week 1.5bp lower.
- Yields ticked a little higher in afternoon trade Friday but the curve leaned bull steeper on the day, with the belly outperforming: 2-Yr yield is down 4.6bps at 4.261%, 5-Yr is down 5.7bps at 4.3328%, 10-Yr is down 5.1bps at 4.4782%, and 30-Yr is down 3.9bps at 4.6982%.
- In futures: Mar 10-Yr futures (TY) up 9/32 at 109-08 (L: 108-26 / H: 109-15.5).
- Other data (industrial production mixed, import prices soft) had little lasting impact.
- The coming week’s data schedule is relatively light, due in part to Monday’s Presidents Day holiday (SIFMA recommends bond cash close, equities closed), with initial jobless claims, February prelim PMIs, and regional Fed manufacturing surveys among the highlights. Supply includes 20Y Bond and 30Y TIPS auctions.
- We also get plenty of Fed communications including the January meeting minutes, and speaking appearances by both doves (Gov Waller) and hawks (St Louis Pres Musalem).
USDCAD TECHS: Bear Cycle Extends
- RES 4: 1.4948 High Mar 2003
- RES 3: 1.4814 High Apr 2003
- RES 2: 1.4503/1.4793 High Fb 4 / 3 and key resistance
- RES 1: 1.4380 High Feb 10
- PRICE: 1.4175 @ 16:54 GMT Feb 14
- SUP 1: 1.4107 50.0% retracement of the Sep 25 ‘24 - Feb 3 bull cycle
- SUP 2: 1.4011 Low Dec 5 ‘24
- SUP 3: 1.3944 61.8% retracement of the Sep 25 ‘24 - Feb 3 bull cycle
- SUP 4: 1.3894 Low Nov 11 ‘24
USDCAD broke lower Thursday, breaking out of a tight trading range this week and remains soft. A key support at 1.4261, the Jan 20 low, has been cleared and this signals scope for an extension of the current bear cycle - a correction. Scope is seen for a move towards 1.4107, a Fibonacci retracement. Initial firm resistance to watch is 1.4380, the Feb 10 high. A break would highlight an early bullish reversal signal.
OPTIONS: Mixed SOFR Rates Trade To Cap Week
Friday's US rates/bond options flow included:
- SFRH5 95.62p, traded half in 2k.
- SFRH5 96.93c, traded 0.25 in 4k.
- SFRH5 95.75/95.62ps 1x2, Traded 3.75 in 3k.
- SFRK5 97.00c, traded for 0.75 and 1 in 3k.
- SFRU5 95.93/95.81/95.68p fly, traded 1 in 1.5k
- SFRU5 96.50c, traded for 6.5 in 1.5k.
- SFRU5 95.87^, traded for 36 in 5k.
- SFRJ5 95.87/95.75/95.68p fly 1x3x2 with SFRK5 95.81/95.68/95.62p ladder 1x3x2, bought for 10 in 2k.
- SFRM5 95.68p, sold at 2.5 in 10k.
- 0QH5 96.00c, bought for 13 in 3k.
- TYH5 107p, bought for 11 in 15k
- TYJ5 107p, bought for 11 in 17k total.
- TYJ5 107/106ps, bought for 7 in 15k total.
