EM CEEMEA CREDIT: Ford Otosan: Q3 2025 Results

2.75% Dec-32 EU-bond

• Spread set at MS + 34bps (guidance was MS + 36bps area)
• Books in excess of E81bln (inc E7bln JLM interest)
• Size: E5bln - in line with initial guidance (MNI expected E4-5bln)

New 15-year Dec-2040 

• Spread set at MS + 75bps (guidance wasMS + 77bps area
• Size: E6bln - up from initial E5bln guidance (MNI expects E5-6bln)
• Books in excess of E78bln (inc E6.75bln JLM interest)
• ISIN: EU000A4EJF17
• Coupon: Long first
• Maturity: 12 December 2040

For both:

• JLMs: BNP Paribas, Citi, Deutsche Bank, DZ BANK and Santander
• Settlement: 14 October 2025 (T+5)
• Timing: Books close at 10:00BST / 11:00CET

From market source / MNI colour

OAT/Bunds a little over 1bp wider at 86.2bp, threatening to register the highest close of ’25.

• The January closing high (86.3bp) protects the Dec ’24 closing high (88.4bp).
• Sell-side comments that we have read generally play down the odds of a meaningful break above 90bp in the spread, unless we receive further OAT-negative news (namely via some form of election/increased odds of RN coming to power).
• Commerzbank note that “if Lecornu fails to find a new team backed by LR and the Socialists over the next couple of days, the most likely scenario now seems to be Macron appointing a PM from the centre-left. We consider this more likely than him dissolving parliament again or stepping down himself. While fiscal dynamics remain very challenging and the political situation deadlocked, opportunistic demand from domestic banks and foreigners should inhibit a sustained widening above 90bp vs. Bunds, while we expect the BTP convergence to extend further out on the curve”.
• Goldman Sachs suggest that “OAT/Bunds already trades near the widest levels in years, the OAT-idiosyncratic component vs. EGBs has risen substantially and France has experienced the largest rise in country risk among major markets since elections last year. In our view, this suggests near-term election risks have largely been pre-empted by current pricing. As a result, we would expect OAT/Bunds to remain near current levels until uncertainty abates, rather than significantly wider. We maintain our target of 70bp at year-end, albeit with upside risks”.
• Mizuho suggest that the appointment of a new PM (pointing to a 35% probability of such an outcome) would trigger a “relief rally” that would push OAT/Bunds back towards ~75bp. Meanwhile they suggest that legislative elections (they ascribe a 55% probability to this outcome) risk a break above 90bp in the spread owing to odds of RN winning. Finally, they believe that a snap Presidential election (10% probability) could risk a break above 100bp, owing to RN’s chances of victory, along with the party’s expansionary fiscal preferences.
• ING can see “French spreads experiencing more widening pressure as uncertainty lingers and new legislative elections loom, but also as the market is looking at increasing tail risks such as an early end to Macron’s presidency. If that latter fear gains more traction, we think the OAT/Bund spread could start to venture well beyond 90bp”.

• SX5E (21st Nov) 4875/4825ps, bought for 1.5 and 1.6 in 5k.
• SX5E (17th Oct) 4850/4800ps, bought at 0.10 in 5k.