SONIA OPTIONS: Call Spread

• Date $MM Issuer (Priced *, Launch #)
• 09/23 $1.5B #MuniFin 3Y SOFR+35
• 09/23 $1.5B Ion Platform 7NC3 8%a
• 09/23 $Benchmark AfDB PerpNC10 6.375
• 09/23 $Benchmark CK Hutchison 5Y +95a
• 09/23 $Benchmark Nationwide 5Y +90a, 5Y SOFR
• 09/23 $Benchmark Gildan Activewear 5Y +140a, 10Y +165a
• 09/23 $Benchmark Lowes 2Y +65a, 3Y +75a, +5Y +90a, 7Y +95a, 10Y +100a
• 09/23 $Benchmark American Electric 30.5NC5.25 6.25%a, 30.5NC10.25 6.5%a

• Spread: MS+37bps (guidance was MS+39bps area)
• Issue size: E3.5bln (a little higher than the E3bln MNI expected)
• Books closed in excess of E46bln (in E1.85bln JLM interest)
• HR 100% vs 2.60% Aug-33 Bund
• Maturity: 14 October 2033
• Coupon: Long First Coupon
• ISIN: PTOTEQOE0023

• Issue size: E1.5bln (the middle of the E1-2bln range MNI expected)
• Books closed in excess of E35bln (in E875mln JLM interest)
• HR 97% vs 2.50% Aug-54 Bund
• Spread: MS+110bps (guidance was MS+112bps area)
• ISIN: PTOTE3OE0025

• Settlement: 30-September-2025 (T+5)
• Bookrunners: Barclays(B&D/DM)/BNPP/CAIXABI/CITI/CACIB/JPM
• Timing: Allocations available, hedge deadline 14:20BST / 15:20CET

With the bullish phase in gold developing further today, resulting in a fresh all-time high close to $3,800/oz, we note that most sell-side analysts remain constructive when it comes to the yellow metal, albeit with some flagging short-term risks: 

• Commerzbank: Gold ETFs tracked by Bloomberg recorded inflows of nearly 27 tons on Friday. This was the strongest one-day increase in ETF holdings since January 2022. Strong buying interest from ETF investors is likely to have given the gold price a boost. According to Bloomberg, ETF inflows since the beginning of the month now total 88 tons. The motives behind this are likely to be complex. In addition to expectations of interest rate cuts, the U.S. President's ongoing attacks on the Fed's independence and geopolitical developments are also likely to play a role. As a result, the surge in the gold price could continue.
• J.P.Morgan: Rate-sensitive gold and precious metals (particularly over more recent Fed cutting cycles) is one of the strongest and most consistent positive performing sectors across commodities over rate cutting cycles. This leaves us with the highest conviction in our bullish view for gold prices, forecasting gold breaks above $4,000/oz in 1Q26
• UniCredit: Conditions remain favourable for further gold-price increases in 2H25. In addition to persistent physical demand for gold from central banks and private investors, continued weakness of the USD is also likely to provide a tailwind to the price of gold. A weakening macroeconomic environment in the U.S. and further interest-rate cuts should also support gold’s role as an alternative to other assets. In addition, geopolitical risks due to the Trump administration’s tariff policy and further attacks on the Fed’s independence could reinforce gold’s safe-haven status. Against this backdrop we maintain our moderately constructive outlook for gold. However, following the recent rally, we see some potential for a short-term correction. Accordingly, we have raised our gold-price forecast to $3,600-3,800 USD/oz by the end of 2025.