COLOMBIA: Pension Reform Progresses, Moody’s Cuts Ecopetrol To Ba1
May-23 12:21
- The government’s pension reform is continuing to progress through the lower house of congress, with 68 out of the 95 articles being approved so far. This includes allowing the threshold of worker contributions that the government will receive to 2.3 minimum wages, with private fund managers managing contributions above that amount. Analysts note that the article defining BanRep as the administrator of the savings fund has not yet been approved. Discussion on the pension reform in the lower house will continue, although a date for the next debate has not yet been set.
- In other news, Moody’s has cut Ecopetrol's long-term rating to Ba1 from Baa3, with a stable outlook. Moody’s said that the downgrade reflected a shift in Ecopetrol’s financial policy as leverage has risen, which along with ongoing dividend payouts and upcoming ambitious capital investment plans could erode the company's liquidity position or lead to higher indebtedness. The move brings Moody’s in line with Fitch and S&P, which both rate the company at BB+.
- No macro data are due today, with April unemployment the next release to note, at month-end.
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BUNDS: Falls through small support
Apr-23 12:21
Bund tests and is through initial small support noted at 130.83.
The contract printed a 130.52 low Yesterday and a 2.553% high in Yield.
Today reference 130.84:
- 2.56% = 130.45 (61.8% retrace of Oct/Dec fall).
- 2.60% = 130.05.
Chart source: MNI/Bloomberg.
EUROZONE ISSUANCE: EU-bond 3/20-year syndication: Priced
Apr-23 12:17
New long 3-year 2.875% EU-bond
- Reoffer: 99.754 to yield 2.951%
- Spread set at MS-6bps (guidance was MS-4 bps area)
- Final books in excess of E43bln (inc E6bln JLM interest)
- Tranche Size: E4bln WNG (MNI had expected E5bln)
- Coupon: 2.875% Ann, ACT/ACT, Short first coupon
- Hedge ratio: 105% 1.30% 1.3% Oct-27 Bobl (ref 95.68 / 2.616% / +33.5bps)
- Maturity: 6 December 2027
- ISIN: EU000A3K4EW6
- Timing: Priced. TOE 13:02BST / 14:02CET. FTT immediately
20-year 4.00% Apr-44 tap
- Reoffer: 108.323 to yield 3.417%
- Spread set at MS+66bps (guidance was MS+69 bps area)
- Final books in excess of E71bln (inc E6bln JLM interest)
- Tranche Size: E4bln WNG (MNI had expected E3bln)
- Hedge ratio: 99% vs 2.50% Jul-44 Bund (ref: 97.09 / 2.688% / +72.9bp)
- ISIN: EU000A3K4EL9
- Timing: Priced. TOE 13:00BST / 14:00CET. FTT immediately
For both:
- Settlement: 30 April 2024 (T+5)
- JLMs: BNP Paribas/BofA Securities(DM/B&D)/Citi/LBBW/Natixis
From market source
PIPELINE: Citibank 3Pt Debt Issuance
Apr-23 12:16
Citibank joins list of issuers, more to come as banks exit earnings blackout:
- Date $MM Issuer (Priced *, Launch #)
- 4/22 $Benchmark Citibank 2Y +70a, 2Y SOFR, 10Y +125a
- 4/24 $Benchmark Canada Gov Int Bond 5Y +10
- 4/22 $Benchmark CDP (Italian bank) 5Y +155a
- 4/24 $Benchmark CK Hutchinson 5Y +80, 10Y +100
- 4/24 $Benchmark Abu Dhabi 5Y +70a, 10Y +85a, 30Y +125a
- 4/24 $Benchmark Kuwait Int Bank Reg S 5.5Y Sukuk investor calls
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