EU REAL ESTATE: International Workplace (IWGLN; NR/NR/BBB) US Relisting ?
• The company has translated both to US$ reporting and US GAAP as standard.
• Buckley Capital Management were pushing for the company to re-list in the US back in September 2024. IWG did not respond directly.
• 50% of revenues and more than 50% of profits are generated in North America (according to Buckley.. and confirmed on management conference calls)
• Given the recent volatility in Gilts there is a real risk for property companies to be tainted with a UK label. We note that Sirius SRELN is also technically British but only generates 26.6% of rents in the UK. Segro SGROLN has a higher share with 65% US assets and Hammerson HMSOLN around 38%.
• Astra Zeneca threatened to quit the UK this week. Disagreements with NICE were a contributory factor.
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SWAPS: Schatz Spreads Pressured Again, Long End German ASWs Bid
German ASWs vs. 3-month Euribor are -0.6bp to +1.1bp, Schatz ASW is lower, while longer-dated ASWs are bid on the day.
- Schatz vs. 3-month Euribor nears 5bp, which protects the March 19 closing low (4.93bp). A move below the latter would target the March 5 closing low (3.31bp).
- Bund vs. 3 -month Euribor remains sub-0bp.
- Buxl vs. 3-month Euribor trades above -35bp, nearing the year-to-date closing high (-34.08bp).
- Commerzbank note that “Schatz ASW cheapening continues, despite tighter long-end spreads of late and the CTD repo specialness increasing ahead of the roll. As the Schatz-€STR spread has never been able to maintain levels above 10bp, further underperformance potential seems limited without larger repricing in repo”.
- They also note that the “EUR 10/30-Year swap curve (6-month) hit new multi-year highs above 10bp. With the Buxl swap spread tightening recently, this could give rise to speculation about Dutch fixed paying interest”. Commerzbank still see further structural steepening potential on the outright swap curve.
SONIA: Put Ladder buyer
SFIQ5 95.95/95.90/95.80p ladder, bought for 1.25 in 5k.
GILT AUCTION RESULTS: 4.00% Oct-63 Gilt
| 4.00% Oct-63 Gilt | Previous | |
| Amount | GBP1.25bln | GBP1.75bln |
| Avg yield | 5.281% | 5.076% |
| Bid-to-cover | 3.51x | 2.80x |
| Tail | 0.3bp | 0.3bp |
| Avg price | 79.013 | 81.845 |
| Low price | 78.967 | 81.799 |
| Pre-auction mid | 78.944 | 81.779 |
| Previous date | 18-Feb-25 |
