EU REAL ESTATE: CPI Property (CPIPGR: Perps Ba3/B+) New Type A Structure
Jun-13 07:36
New Issue will have a new “Type A” structure.
- Will get 100% Equity Credit from Moody’s initially and revert to 50% if the CFR is Investment Grade. The outstanding Type B perps have 0% from Moody’s and 50% from S&P until October 2030.
- 100% from IFRS and 50% from S&P to the First Reset.
- Importantly, the new Type A perps will convert to Conversion Beneficiary Units (CBUs) under extreme financial stress and automatically if the CFR is Caa1 or below.
- CBUs will carry no voting rights and rank equal to the most preferential form of equity.
- Type A notes will have a sliding step-up date of +5yrs longer if IG with S&P.
- If the CFR is IG: Type A&B will rank equally. Conversion to CBU will be suspended. If there is a jump-to-default scenario, all perps will be treated equally.
- If CFR is Ba1-B3 range, Type A can convert to CBU in the case of jump-to-default. If CBUs are not delivered, the notes will be treated as if they were.
- If Caa1 or below, Automatic conversion to CBU.
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EGB SYNDICATION: Latvia 5-year benchmark: Mandate
May-14 07:36
- EUR Benchmark 5Y Fixed (May 21, 2030) MS+80 Area (we think there is a good chance of a large E1.0-1.5bln transaction size)
- Coupon: Annual, act/act ICMA
- Format: Reg S CAT1, registered, senior unsecured
- Settlement: May 21, 2025
- ISIN: XS3075496896
- Bookrunners: BNPP (B&D), GS, JPM
- Timing: May price today
Details as per Bloomberg
GILTS: Yields Edge Lower, Yesterday's Low In Futures Holds, 10-Year Supply Due
May-14 07:27
Yesterday’s low in gilt futures holds at the open (91.47), as the contract bases at 91.48, before recovering to ~91.65 last.
- The short-term bearish technical threat remains present, with the next support of note located at the April 15 low
- Yields 1-2bp lower across the curve, 2s10s and 5s30s curves stick within multi-week ranges.
- 2s continue to trade sub-4.00% after yesterday’s brief and limited break above.
- 10-Year yields have pierced the April 15 high (4.672%) during the past couple of sessions but haven’t meaningfully extended beyond that point.
- Fundamentals continue to point to further curve steepening, although a more activist approach from the BoE & DMO (when it comes to skewing bond sales more towards the short end) presents a risk to that view.
- Those steps from official agencies have played into the move away from April lows in long end swap spreads (along with broader macro dynamics centred on the tariff picture).
- GBP STIRs roughly in line with levels we flagged ahead of the gilt open, showing 48bp of BoE cuts through year-end, with the next 25bp step fully discounted through September.
- On the supply front, the DMO will come to market with GBP4.25bln of the 4.50% Mar-35 gilt this morning.
BOE: Breeden Sticks To Regulatory & Counterparty Matters
May-14 07:19
BoE Deputy Governor Breeden’s address seems geared towards counterparty and regulatory matters, as opposed to monetary policy.
- We noted that the setting for the address (keynote speech at the ISDA AGM) could limit the scope for meaningful monetary policy comments.
- Full text here.
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