EU COMMUNICATIONS: TMT: Week In Review
• Spreads were reasonably stable given the AI sell-off. SES has had a volatile few weeks but a 13% rally in equities helped the curve move 22bps tighter. Other high beta names however moved 7-8bps wider – Nexi, Prosus, Teleperformance and Global Payments.
• Chorus issued a 7Y in line with our FV. Our issuer profile noted leverage headroom, albeit sale of government held subordinated equity is a potential headwind.
• Canal+ has mandated a 5Y bond. The company took full control of MultiChoice – a Pay TV service for Anglo/Lusophone Africa – in October. This deal will partly refinance the bridge loan. No credit rating is expected but comps from the leads imply low BBB.
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PIPELINE: Corporate Bond Update: GM Financial, Dominican Republic on Tap
- Date $MM Issuer (Priced *, Launch #)
- 10/22 $1.5B #Alberta 10Y SOFR+81
- 10/22 $1B Rep of Korea WNG 5Y +19a
- 10/22 $Benchmark GM Financial 3Y +110a
- 10/22 $Benchmark Dominican Republic 10Y 6.25%a
- 10/22 $Benchmark Pershing Square 7Y investor calls
SEK: Risk In EURSEK Remains Tilted To The Downside
- Risk in EURSEK remains tilted to the downside, with spot hovering just above support at 10.9036, the Sep 15 low. Clearance of this level would expose the April 4 low at 10.7941. Spot is on track for a sixth consecutive close lower, currently -0.25% today.
- It’s been another session with relatively few domestic catalysts. Riksbank Deputy Governor Jansson noted that it is reasonable to look through the upcoming temporary reduction in food VAT. However, the Board will “monitor how households' and companies' expectations and behaviour are affected, so that fluctuations in inflation that are temporary to begin with do not become more permanent."
- This isn’t a surprising view to hold. We continue to believe that the policy rate will remain at 1.75% for some to come, with the risk of a hike to 2.00% somewhat greater than the risk of another cut.
- Today’s SEK strength comes despite a fairly subdued session for European equity futures. This week’s SEK outperformance may therefore reflect increased sympathy for domestically-focused narratives (i.e growth tailwinds from accommodative monetary policy and an expansionary 2026 budget).
GILT AUCTION PREVIEW: CORRECTION: Auction Size
The DMO has announced a GBP3.75bln, not GBP4.75bln auction size for the new 4.125% Mar-33 Gilt next Wednesday.
