HYBRIDS: Repsol: Perp Guidance
• Guidance: €750m PerpNC6.25 4.25%a
• Books: >€3.75bn
• Size is equal to REPSM 2.5 NC27 unsurprisingly.
• IPT: €BMK Perp NC6.25 4.625%-4.75%a
• FV: We see 4.25%
• Sub_Sen of +105 (same as NC31) vs Senior of 73bps gives Z+178
• 10bps of Z-Spread curve is in line with TTEFP and ENIIM curves (see chart)
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SPAIN AUCTION PREVIEW: On offer this week
Tesoro Publico has announced it will be looking to sell a combined E4.0-5.0bln of the following Oblis at its auction this Thursday, October 16:
- the 1.25% Oct-30 Obli (ISIN: ES0000012G34)
- the 2.55% Oct-32 Obli (ISIN: ES0000012K61)
- the 3.20% Oct-35 Obli (ISIN: ES0000012P33)
Tesoro Publico has additionally announced it will be looking to sell a combined E2.0-3.0bln of the following letras at its auction tomorrow, October 14:
- the 3-month Dec 5, 2025 letras
- the 9-month Jul 10, 2026 letras
SOFR OPTIONS: Goldman Recommend Mid-Curve Hedge Against Trade War Escalation
Late on Friday Goldman Sachs recommended going long the 0QZ5 97.25 calls at 8.0, targeting 16.0, with a stop set at 8.0 as a “tactical hedge against the risk that tariff concerns escalate”. The situation has obviously calmed a little over the weekend.
US: Bessent Sees Trump Post Turning Table on China
"[RTRS] BESSENT ON CHINA TRADE: TRUMP'S FRIDAY SOCIALMEDIA POST TURNED THE TABLES; CHINA MADE A MISCALCULATION" - Reuters
