BRAZIL: Guillen Reinforcing MPR Message, Valor on FX Swap Strategy

30-Year gilts outperform Tsys and Buxl on the day, with Tsys impacted by ongoing questions surrounding Fed independence, while the Buxl has been impacted by spill over from French political risks/OAT weakness.

• Gilts have perhaps received some insulation after DMO consultation minutes showed ongoing appetite for a shortening of the WAM on offer on the part of both gilt investors and GEMMS.
• Note that 30-Year gilt yields have been unable to retest multi-decade highs registered back in April (5.659%).
• Meanwhile, gilt futures have rebounded from fresh cycle lows registered just after the open.

• Date $MM Issuer (Priced *, Launch #)
• 08/27 $3B #Ontario 5Y SOFR +52
• 08/27 $2B *ESM 5Y SOFR +39
• 08/27 $1.25B Saudi Awwal 10NC5 +220

• USD2bln WNG of the new 5-year Sep-30 ESM-Bond
• Spread set earlier at SOFR MS+39 (SA 30/360) (guidance was SOFR+40 Area, IPT was MS+42 area, that was equiv. to CT5 + ~7.3bp)
• Books closed in excess of $13.3bn excl. JLM interest
• Issuer: European Stability Mechanism (TICKER: ESM)
• Issuer Ratings: Aaa (stable) (Moody's) / AAA (stable) (S&P) / AAA (stable) (Fitch)/ AAA (stable) (Scope)
• Format: Registered Notes, Reg S (NSS) / 144A
• Ranking: Senior, Unsecured, Unsubordinated
• Listing: Luxembourg
• Settlement: 4 September 2025 (T+6 (TARGET) / T+5 (NY))
• Maturity Date: 4 September 2030 (5Y)
• HR 101% vs CT5 (T 3 ⅞ 07/31/30 )
• ISIN: Reg S: XS3171756128 / 144A: US29881WAG78
• Coupon: Fixed, Semi-annual, 30/360, Following, Unadjusted
• Bookrunners: CACIB(DM/B&D) / DB / JPM
• Timing: Hedge deadline 15.30CET / 14.30UKT / 9.30EST

The transaction comes ahead of a USD3bln redemption for the ESM in September. That line also had a 5-year maturity initially.