EU FINANCIALS: Financials - Week in Review 06/06/2025
Jun-06 13:18
Results & Headlines
- Wells Fargo's asset cap was lifted after 7 years.
- Our Monthly AT1/RT1 review illustrated consistently accurate FVs in May. https://mni.marketnews.com/3T9ApFI
- BPER received the all clear from Consob for their Sondrio tender.
- ING decided to temporarily increase its AT1 target to 13%, slowing buybacks.
- Paragon bank posted decent earnings. We would to see like cost of risk stabilise around these levels. https://mni.marketnews.com/4jWr9jz
- Fiserv bought the rest of Merchant Services from AIB, boosting CET1 by 35bps.
New Issues
AT1
- Nationwide issued a £ AT1 at 7.875%, 0.125% wide of our FV. Currently priced at 101, yielding 7.67%. https://mni.marketnews.com/4kZmX3r
- RBC's $ AT1s priced at 6.75% , 0.125% wide of our FV. Currently trading 100.1 price, 6.78% yield.
Tier 2
- Hiscox $ 11NC10 Tier 2 continued the trend of 1 year non-call extensions for tier 2 instruments from insurers. The came at 7%, inside our 7.2% FV. Performing well, they now price at 6.8%
Senior
- TP ICAP refinanced with a £ 7year bond. There was also a tender for their existing 2026 bond at a c0.5pt premium. They priced 25bps inside our FV, which we had at IPT. This leaves the curve kinked at 45bps pickup between 3.6 and 4.6years and only 25bps for the 2.4year extension from 4.6 years to 7years, which we think some may see as too flat. https://mni.marketnews.com/3T9Avgy
- BKS Bank issued a 5Y Sr Pref at MS+165, 15bps of our FV. It has tightened 2bps. At this level it trades close fellow Austrian bank to Kommunalkredit but which is 1 notch lower at S&P. https://mni.marketnews.com/4jCRqmu
- Commerzbank issued two Sr Bail-in notes, a 5NC4 and 9NC8. Both priced within 3bps of our FV and were digested reasonably well.
- MUFG issued two senior bail-in notes, a 6NC5 and 11NC10. They priced at MS+100 and +135, both 8bps wide of our FV. They are trading -1bp and -10bps I spread from launch respectively.
- New York Life and Mass Mutual issued FA backed notes. The NY Life - https://mni.marketnews.com/3Hq2O7V - came first and priced 22bps wide of our FV. It has rallied 9bps. Mass Mutual priced off of this performance and also priced 20bps wide of its FV. It has rallied 5bps. https://mni.marketnews.com/3FD0MB0
- UniCredit priced 2 Sr Prefs, a 6NC5 and 10Y bullet. They priced at MS+95 and MS+125 for NICs of 5 and 8bps respectively. These are trading Flat and -1bps respectively vs launch spreads.
- Cajamar issued a 6NC5 Sr Pref which priced 3bps wide of our FV
- NatWest's 3y FRN came 5bps wide of our FV.
- RBC's FRN's priced 2bps inside our FV.
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Historical bullets
EQUITIES: Stoxx600 call buyer
May-07 13:13
SXXP (20th June) 557.5c, bought for 1.6 and 1.7 in ~15k.
ITALY DATA: Weak Retail Sales Momentum Suggests Consumption Drag In Q1
May-07 13:13
Weak Italian retail sales momentum suggests sequential quarterly household consumption growth was tepid - possibly negative – in Q1.
- March nominal retail sales fell 0.5% in March. The three analysts submitting forecasts for the print were between +0.1 and +0.3%. Real sales were also -0.5% M/M, the fifth negative sequential print in the last six months. That dragged 3m/3m growth down to -0.59% (vs -0.42% prior).
- ISTAT retailer confidence has been expansionary throughout the last 3 years, but momentum has been waning in 2025.
- Although the Q1 flash GDP report indicated that domestic demand made a positive contribution to growth, a detailed split across expenditure component was not available.
CROSS ASSET: Estoxx Futures closes the Gap, Bund test a new high
May-07 13:09
- Estoxx futures has now closed the Opening gap down to 5209.00, not a Tech level.
- This latest push lower helps Bund print a new intraday high, but no real trigger for the move, mostly some order related flow, and a continuation since Bond went bid post the French Auctions this Morning.
- Support in VGM5 is at 5178.00, this is only Yesterday's low.
