LNG: Ships Hold Key to Asia Upping Russian LNG Imports: Platts
Sep-26 15:01
The European Commission’s proposal to ban Russian LNG from 2027 could see more cargoes flowing to Asia, sources told Platts.
- The proposal would accelerate the phase-out of around 10 Bcm of spot and short-term Russian LNG volumes in Europe, possibly as early as April 2026.
- Long-term contracted flows from Yamal LNG could also end by late 2026 or 2027, depending on final legislation.
- Yamal LNG could redirect cargoes to Asia, although shipping restrictions pose challenges as the Murmansk transshipment terminal is under sanctions. This limits options to 14 inefficient icebreakers or STS activity in the Med.
- Most Yamal LNG currently goes to Europe, with some exports to China, Taiwan and South Korea.
- An EU ban on LNG transshipments in March has already shifted transhipmentss toward Murmansk and Asia.
- Analysts expect shipping requirements could rise sharply, from 18–29 tankers today to 35–68 if cargoes are redirected around the Cape of Good Hope.
- Asian buyers may accept Yamal LNG if prices are competitive, though financing remains difficult.
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ESM ISSUANCE: USD2bln WNG New 5-Year: Priced
Aug-27 14:58
- USD2bln WNG of the new 3.75% 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
- Reoffer 99.855 to yield 3.782%
- 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: 3.75%, Fixed, Semi-annual, 30/360, Following, Unadjusted
- Bookrunners: CACIB(DM/B&D) / DB / JPM
From market source and Bloomberg.
The transaction comes ahead of a USD3bln redemption for the ESM in September. That line also had a 5-year maturity initially.
STIR: BLOCK: SOFR White Pack
Aug-27 14:41
- 4,000 SOFR White packs (SFRU5-SFRM6) +0.000 at 1037:12ET - likely swap-tied sale with spds running wider in the short end
FED: September Rate Cut Base Case For Most, Though Some Holdouts Remain (2/2)
Aug-27 14:39
Elsewhere, multiple analysts now see a cut in September whereas previously they'd seen one later in 2025.
- Deutsche pulled forward their next-cut call from December to September (but still see a December cut).
- Barclays also pulled forward their view for the next cut to September.
- Natixis appears to have shifted its view for the next cut in October to be pulled to September "from this early juncture we think a September hawkish ease is more likely than not (assuming a 25bp cut), but there is still a great deal of time, and data, between now and the September FOMC meeting".
- SocGen likewise ("Previously, our base case was just one 25bp cut, and late this year (October or December). However, a rate cut at the next FOMC in September now looks an above 50% probability.")
- RBC isn't yet convinced of a cut before December: "While the odds of a rate cut next month are high, we aren’t yet convinced it is a slam dunk."
