TECHNOLOGY: Infineon Q125 Results

2.625% Jul-28 EU-bond (EU000A4D5QM6)

• Spread set at MS+14bps (Guidance was MS+15 bps area)
• Size confirmed at E5bln (MNI had expected E4-6bln)
• Books in excess of E40bln (in E5.5bln JLM interest)

2.50% Oct-52 EU-bond (EU000A3K4DT4)

• Spread set at MS+126bps (Guidance was MS+128 bps area
• Size: E3bln versus guidance of E2bln (MNI had expected E4-6bln)
• Books in excess of E49bln (in E5bln JLM interest)

For both:

• Settlement: 15 April 2025 (T+5)
• Bookrunners: BNP Paribas, Deutsche Bank, J.P. Morgan, Natixis and Nomura
• Timing: Books to close at 10:00BST / 11:00CET, today's business

From market source

• The DMO will kick off gilt issuance for the week this morning with GBP2.25bln of the 30-year 4.375% Jul-54 gilt on offer.
• Markets have been very volatile and long-end demand has been questionable globally. Yesterday, the BOE’s medium-dated APF operation saw no bids for gilts with residual maturities between 13-20 years. Overnight there was a soft 30-year JGB auction. There will also be a long-end syndicated tap of the 2.50% Oct-52 EU-bond today. Both the EU syndication and the gilt auction will be seen as wider indications of long-end demand globally.
• Given these global concerns, there may be more of a concession than normal ahead of the end of the bidding deadline. And indeed, we are already seeing that to some extent with 10s30s steepening in gilts, but not in USTs or Bunds in the European morning session.
• However, it is hard to know how much recent auction performance will factor in - we think the general conditions today are more relevant. Recent auctions have been well received with both bid-to-covers in 2025 coming in below 3x but since September having been in a 2.75-3.08x range. Tails have ranged from 0.2bp (at the last auction) to 0.9bp in September – but outside of that one auction all tails have been between 0.2-0.4bp.
• There are no further auctions of this gilt scheduled for the quarter, and we are unsure whether the syndication in May will see a new 20-year gilt or new 30-year gilt launched. Either way, we would expect to see a new 30-year gilt via syndication shortly, so this may be the last auction of the 4.375% Jul-54 gilt as an on-the-run issue.
• Timing: Results will be available shortly after the bidding window closes at 10:00BST.