EU CONSUMER CYCLICALS: El Corte Inglés: 8Y FV
(CRTING; NR/BBB- Pos/BBB- Pos) (private)
- WNG €500m 8y +155a vs. FV +121 (-34)
- CoC, MWC, Clean up (75%). 3m par call
- UoP is to refi a €420m loan due next year. It did flag in its inaugural issuance last year more refi into public bonds would occur. Has another ~€1b in loans due 2028.
- WOWAU (not CAFP) is acting as a (clear) floor to our FV.
Worth noting: 93% of real-estate owned, valued at €15.7b, revenue growth firm (+4%), which alongside margin expansion (+70bps on EBITDA at 8.2%) has helped it delever 0.4x y/y (into IFRS adj. g/n 2.4x/1.9x). Margins will look good vs. our grocers but this is more a department store skewed conglomerate (fashion & retail 46%, Home & Electronics 22%). Public reporting looks annual only.
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OAT: Few notable Block trades are going through
Few Block trades Buyers in OAT in the past 15 minutes.
- OATU5 7.92k at 123.88.
- OATU5 2.38k at 123.97.
- OATU5 960 at 123.96.
GILTS: Off Lows After Auction, Curve Holds Steeper
Gilts hold lower given cues from global peers and with crude oil off yesterday’s lows, although solid demand at the latest 5-Year auction has provided some support in recent trade.
- Futures stick within yesterday’s range, trading as low as 92.37 before recovering to ~92.50.
- Bullish technical conditions remain intact in the contract, initial support and resistance located at yesterday’s low (92.23) & the 50.0% retracement of the Jun 13-16 down leg (92.95), respectively.
- Yields 1-3bp higher, curve steeper.
- 2s10s and 5s30s stick within multi-week ranges, stabilising back above 60bp and 120bp, respectively.
- BoE-dated OIS is little changed on the day, showing ~48bp of cuts through year-end, with the next 25bp step almost fully discounted through the end of the September MPC (~24.5bp of easing showing through that horizon).
- SONIA futures flat to -3.0.
- Expect global cues to dominate for the remainder of the day, with ongoing focus on the next stages of the Israel-Iran conflict.
- Locally, CPI data will cross on Wednesday, ahead of the BoE’s Thursday decision.
- We see downside risks to the headline and services CPI reading (our full preview is available here).
- Still, the data shouldn’t have too much impact on the BoE decision, with no change expected by both the sell-side and markets, but a low print could impact the vote split.
BoE Meeting | SONIA BoE-Dated OIS (%) | Difference vs. Current Effective SONIA Rate (bp) |
Jun-25 | 4.211 | -0.2 |
Aug-25 | 4.023 | -19.0 |
Sep-25 | 3.967 | -24.5 |
Nov-25 | 3.813 | -40.0 |
Dec-25 | 3.736 | -47.7 |
Feb-26 | 3.623 | -59.0 |
Mar-26 | 3.595 | -61.8 |
GERMAN AUCTION RESULTS: Green Bunds
| 2.10% Apr-29 Green Bobl | 2.30% Feb-33 Green Bund | |
| ISIN | DE000BU35025 | DE000BU3Z005 |
| Total sold | E1bln | E500mln |
| Allotted | E989mln | E495mln |
| Previous | E945mln | E908mln |
| Avg yield | 2.02% | 2.37% |
| Previous | 2.26% | 2.40% |
| Bid-to-offer | 3.18x | 3.49x |
| Previous | 2.43x | 2.04x |
| Bid-to-cover | 3.22x | 3.53x |
| Previous | 2.57x | 2.25x |
| Avg Price | 100.28 | 99.53 |
| Low Price | 100.28 | 99.52 |
| Pre-auction mid | 100.246 | 99.478 |
| Prev avg price | 99.37 | 99.27 |
| Prev low price | 99.36 | 99.25 |
| Prev mid-price | 99.329 | 99.234 |
| Previous date | 21-Jan-25 | 21-Jan-25 |
