EU TRANSPORTATION: Air France-KLM; FY24 Results (x2)
(NR/BB+/BBB-) (Equiteis +21%)
An edit we do see supply coming - if not for the matured €500m Jan line, for hybrid refi (into normal bonds). It has a €500m 2022 issued hybrid on a 6% coupon that will step-up in July - it can redeem them at any time from then and indication in earnings call is it will refi.
Guided earnings growth will move it below 1.5-2.0x target on current debt load so it has room for the above. Another €0.5b steps and is callable from July 2026 (on a 6.9% coupon currently) and another €1.5b on a Nov-27 call (paying 6.4% currently).
It's paying avg. €230m/6.4% on the €3.6b hybrid stack that is equity under IFRS vs. €57m/3.6% on the €1.6b vanilla bonds. Neither S&P nor Fitch give equity treatment.
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AUSTRIA AUCTION RESULTS: 3.45% Oct-30 RAGB / 3.20% Jul-39 RAGB
| 3.45% Oct-30 RAGB | 3.20% Jul-39 RAGB | |
| ISIN | AT0000A38239 | AT0000A3D3Q8 |
| Issue Amount | E863mln | E863mln |
| Previous | E200mln | E150mln |
| Allotted | E750mln | E750mln |
| Previous | E150mln | E150mln |
| Avg yield | 2.477% | 3.026% |
| Previous | 2.661% | 3.067% |
| Bid-to-cover | 3.45x | 2.64x |
| Previous | ||
| Bid-to-issue | 3.00x | 2.30x |
| Previous | ||
| Avg price | 105.105 | 102.992 |
| Low price | 105.090 | 101.931 |
| Pre-auction mid | 104.927 | 101.775 |
| Prev avg price | 104.157 | 101.537 |
| Prev low price | ||
| Prev mid-price | ||
| Previous date | 08-Jan-25 | 22-Oct-24 |
GILT AUCTION RESULTS: Softish 5-year gilt auction (but not terrible)
The lowest accepted price (LAP) a little below the pre-auction mid-price on the secondary market there. However, the 4.375% Mar-30 gilt has shrugged off the disappointment and is trading higher now.
- There was quite a concession for the auction with the price falling from above 100.46 in the 5-minutes ahead of the auction cut off window. We are still trading notably below that level and closer to the average auction price at writing.
- Not the strongest auction but still a decent volume of demand (bid to cover in excess of 3x at 3.05x).
- Weakness seen in gilt futures going into the bidding window closing too (albeit there was some downside moves in Bunds concurrently). In gilt futures we were around 92.65 5 minutes before the auction close, hit a low of 92.490 and are now back at 92.560 at writing.
EGBS: Bund call spread vs call
RXH5 134/135cs 1x2 bought for 4 in ~5.1k vs selling 136c at 6.5 in ~1.9k.
