Obbligazioni perpetue e subordinate Tutto quello che avreste sempre voluto sapere sulle obbligazioni perpetue... - Cap. 3

[solovaloreaggiunto]

DB – 5.33% not called, slight RV in the 7.6% preferred

· Deutsche Bank’s 5.33% perp-13 was not called on its
first call date yesterday, and as a result the bond has dropped
around 5pts from its highs in the beginning of this week
(95pts). We did not expect a call – see our comments in the
morning note 8 July - not least as EBA made the phase out
schedule uncertain in the summer with the Q&A release. We would
not expect DB to take any call decisions on T1s until the phase
out schedule is clear.

· Even if step-up T1s phase out as seniors after call and
step, on balance, we believe there are compelling arguments for
DB not to call the 5.33% T1. Although the bond would be 100bps+
expensive vs. long-dated DB seniors we believe the bond would
have value for DB as a perpetual bail-inable bond which could
count to the 8% of liabilities that regulators could bail in,
according to draft regulation. In this way, the bond would
support DB’s cost of funding.

· Fair value if the 5.33% perp-13 bond would not be
called, is in the low 80’s at best - DB’s perps are generally at
YTM in a wide range between 6% and 8%, using Bloomberg’s S201 to
calculate forward coupons. Based on our view as outlined above,
we would consider that level (or lower) as ultimate FV, but we
would not expect the bond to move there in the coming months.
First EBA would need to clarify the regulatory treatment of
step-up bonds, and thereafter DB has taken their final decisions
with regards to their bonds.

· We would therefore continue to switch out of DB’s 5.33%
perp-13. At this point we view DB’s somewhat illiquid 7.6% USD
preferred share (pfd) Tier 1 first callable in 2018 as
attractive on a relative basis. This bond does not step, hence
is likely to phase out gradually to T2. In current markets
though the bond would be expensive for DB to leave outstanding,
hence it is more likely to be called in our view. The preferred
shares trade at 6.6% YTC and 7.9% YTM. We note though that the
shares have a regulatory call at par (bond currently at 105pts
equivalent).

da un broker

 

[amorgos34]

Anche questa mattina in pesante ribasso.

.

[


· Fair value if the 5.33% perp-13 bond would not be
called, is in the low 80’s at best

In questo momento JPM è fuori a 92 in denaro.
(in apertura molto più basso)

Concordo col fair price poco sopra 80, qualcosa mi sfugge.

 

[fabriziof]

qualcuno qui l'ha preso sopra 90 ,non credo

 

[Cat XL]

DB – 5.33% not called, slight RV in the 7.6% preferred

· Deutsche Bank’s 5.33% perp-13 was not called on its
first call date yesterday, and as a result the bond has dropped
around 5pts from its highs in the beginning of this week
(95pts). We did not expect a call – see our comments in the
morning note 8 July - not least as EBA made the phase out
schedule uncertain in the summer with the Q&A release. We would
not expect DB to take any call decisions on T1s until the phase
out schedule is clear.

· Even if step-up T1s phase out as seniors after call and
step, on balance, we believe there are compelling arguments for
DB not to call the 5.33% T1. Although the bond would be 100bps+
expensive vs. long-dated DB seniors we believe the bond would
have value for DB as a perpetual bail-inable bond which could
count to the 8% of liabilities that regulators could bail in,
according to draft regulation. In this way, the bond would
support DB’s cost of funding.

· Fair value if the 5.33% perp-13 bond would not be
called, is in the low 80’s at best - DB’s perps are generally at
YTM in a wide range between 6% and 8%, using Bloomberg’s S201 to
calculate forward coupons. Based on our view as outlined above,
we would consider that level (or lower) as ultimate FV, but we
would not expect the bond to move there in the coming months.
First EBA would need to clarify the regulatory treatment of
step-up bonds, and thereafter DB has taken their final decisions
with regards to their bonds.

· We would therefore continue to switch out of DB’s 5.33%
perp-13. At this point we view DB’s somewhat illiquid 7.6% USD
preferred share (pfd) Tier 1 first callable in 2018 as
attractive on a relative basis. This bond does not step, hence
is likely to phase out gradually to T2. In current markets
though the bond would be expensive for DB to leave outstanding,
hence it is more likely to be called in our view. The preferred
shares trade at 6.6% YTC and 7.9% YTM. We note though that the
shares have a regulatory call at par (bond currently at 105pts
equivalent).

da un broker

Chi' e questo broker?

 

[Cat XL]

DB: saves now to pay later.

Deutsche failed to give notice to call its €1bn 5.33% Tier 1 bond last night. Deutsche has adopted an economic stance on calling way back since 2008 much to the annoyance of bondholders. This latest move might be justifiable on the basis that it still counts as capital under Basel 2.5 but form 1st Jan, the bond functions as senior (and bail-inable) debt from a regulatory perspective under Basel 3. The bank had expected the bond to be grandfathered as Tier 2 capital but that was ruled out by latest guidance from the EBA. Deutsche had an opportunity here to show that it has more respect for its bondholders – and by doing so could have ticked the ‘economic’ box if it had the effect of lowering the cost of new issuance. Its Q2 preso also assumes the bank will issue €11bn of AT1 over time to help meet the 3% leverage target. The bond is slightly weaker this morning as investors assume that it will be called or exchanged in the near future (callable quarterly from now) but we suspect that Deutsche has missed a trick here. There is some spill-over into other hybrids this morning although the market is generally soft.

 

[fidw99]

è arrivato in denaro fino a 92,50

incredibile solo 10 minuti prima si comprava a 90-91...

per me molti broker erano corti da giorni e aspettavano lo sciacquone per ricomprare

il fatto che ora il titolo quoti sopra 90 sta comunque ad indicare che c'è un'aspettativa che prima o poi DB faccia qualcosa...

certo fino a che non ci saranno le ultime indicazioni dell'eba sarà un bel casino con ogni emittente che segue le proprie logiche

il plafond dei tier1 scende di un 10% all'anno, in più dal 19/09 scenderà di un ulteriore miliardo di euro (questa è la seconda emissione tier 1 più grande in circolazione di DB), chissà che seguendo unicamente logiche economiche non eserciti la regolarity par call sulle emissioni sopra 100 con cedola ben più elevata...

quindi per me questa emissione ora la considero con scadenza 2022... (a questi prezzi con ytm intorno al 5%...)

 

[Cat XL]

è arrivato in denaro fino a 92,50

incredibile solo 10 minuti prima si comprava a 90-91...

Andamento schizzofrenico. Stamattina presto perdeva quasi due punti.

 

[negusneg]

Questa è di ieri

August 20, 2013, 4:01 AM ET
Watching for Deutsche Bank’s Perpetual Call


ByArt Patnaude

Deutsche Bank AG, Germany’s largest lender, has a decision to make Tuesday about a bond that soon will no longer play one of its most valuable roles at the bank.​

The bank will have to weigh myriad considerations in choosing whether to call – or pay back – one of its perpetual bonds, which unlike most bonds have no definitive maturity date.
The €1 billion ($1.33 billion) of so-called Tier 1 bonds have for the last 10 years counted as regulatory capital on the bank’s balance sheet. That is, regulators considered it to be the kind of asset that could be used to absorb losses if things start going badly.
Perpetual bonds were the ones impacted by a controversial chat tool on the European Banking Authority’s website that inadvertently moved markets. The prices of bonds from lenders including Deutsche Bank and Barclays PLC jumped as much as 15% as the EBA started releasing guidance on how bonds would be treated in terms of regulatory capital.
But from Jan. 1, rules in Europe about the perpetual bond in this case will change, and this particular Tier 1 bond will no longer have the same rank as before. The new rules are a response to the financial crisis, when taxpayers were forced to foot the bill for a string of bank-sector bailouts in almost every major European country.
The Tuesday deadline for Deutsche Bank’s decision comes ahead of the perpetual bond’s first call date on Sept. 19, when the lender can opt to pay back bondholders, like it would at the maturity date of a more traditional bond. The bank has to make its intentions known 30 days in advance of the call date.
The decision will give a hint as to how the bank, as well as other major financial institutions in Europe, might approach new European-wide rules concerning bank capital and existing debt, analysts said.
The dates, costs, and crisis have all converged to make this an event that has left detail-loving analysts absolutely tickled.
Because, well, it’s complicated.
The analysts widely expect Deutsche Bank not to call the bond. That is, it won’t pay it back, instead rolling it over at least until the next call date in March. In addition to sound economic considerations, the bank has a bit of a reputation on this front. Back in late 2008, Deutsche Bank shocked the market when it decided not to call a perpetual bond.
If Deutsche Bank does not call the bond, it will get to keep that €1 billion as regulatory capital through December. It will also see the current 5.33% interest payment get a lot cheaper. After the September call date, the coupon changes to 1.99 percentage points over the three-month libor rate, meaning around 2.02%.
“Investors are going to get stuffed if this doesn’t get called,” said Roger Francis, credit strategist at Mizuho International PLC.
Not only will investors see their regular payments drop, but those expecting to get their lump principle back will still have to wait.
Then there’s the consideration of what the cost-benefit will be for Deutsche Bank after Jan. 1. Bonds that can absorb losses generally cost more to the issuer than regular bonds. Next year, when these bonds won’t count as regulatory capital, it means these could essentially look more expensive than what Deutsche Bank would sell new bonds for.
This simplification of the outcomes barely scratches the surface of factors in the decision-making process for what is an incredibly complicated issue, and not just at Deutsche Bank. Other major banks in Europe are facing the same types of decisions. Each case is different.
Royal Bank of Scotland analysts earlier this month assessed the incentives banks have to call their Tier 1 bonds. Deutsche Bank, along with Commerzbank AG and ABN Amro Bank NV, were seen to have a low incentive, meaning they were likely to leave some bonds outstanding with bondholders.
BNP Paribas SA, Lloyds Banking Group PLC, Barclays, Societe Generale SA, Credit Agricole SA, Intesa Sanpaolo SpA and UniCredit SpA were likely to call their Tier 1 bonds, RBS said.
Still, how Deutsche Bank balances the pros and cons will be closely watched. Analysts don’t expect any significant shockwaves in the market, but it will provide a mini crystal-ball moment.
“This will give some insight on what (Deutsche Bank) might do in the future,” said Jeroen van den Broek, credit strategist at ING .

 

[solovaloreaggiunto]

ora sbraga pure il NOK... evvai valute out of control anche oggi..

 

[negusneg]

A suo tempo (dicembre 2008) questa notizia mi era sfuggita. Certo che sono passati secoli da allora...

Bank of China furious at Deutsche debt move




By Sean Farrell, Financial Editor

Monday, 22 December 2008
Investors in bank debt are threatening to boycott lenders that follow Deutsche Bank in breaking an unwritten rule and failing to exercise a call option on subordinated debt.



In a co-ordinated action, angry bond investors are writing to bank treasurers and investor relations heads telling them that any failure to exercise a call option will be considered a breach of trust that could cause all the issuer's debt to be shunned.
Deutsche stunned the debt market last week by choosing not to redeem €1bn (£932m) of subordinated lower tier 2 bonds because to do so was cheaper than refinancing. But though the move saved Germany's biggest bank up to €150m, it caused fury among buyers of the debt who worked on the assumption that bonds would always be redeemed at their first call date.
The letter, seen by The Independent, said a bank's decision not to call debt would be taken to mean "the institution is in such difficulty that it is an impossibility to call the instrument or the institution feels that it is in such a strong position that it can afford to alienate itself from the support of a wide portion of the fixed-income institutional investor community".
Bank of China, a major buyer of bank debt, has gone further in its communication with issuers. The giant Chinese lender's Hong Kong operation has told banks that "any non-call by a given institution will result in that institution's debt (not just lower tier 2 but senior and tier 1 as well) being ineligible for future investment consideration".
Bank of China added that Deutsche Bank had also been removed from consideration as a counterparty for any credit derivative transaction in future.
The bank is writing to all of Britain's banks, along with lenders elsewhere in Europe.
The bond buyers are stressing to issuers that they cannot afford to become debt-market pariahs when their capital buffers against losses are under threat from a global downturn and they may need to raise more capital. Without being able to issue debt, which counts as lower-grade tier 1 and tier 2 capital, institutions would be forced to seek costly new equity, angering their shareholders.
"Non-call may indeed save you some money today but it will seriously impact your capital structure options in the future," Bank of China warned. "Being only left with severely dilutive equity to raise capital is not in anyone's interest."
Deutsche Bank will be hoping that other banks follow its lead, giving it safety in numbers. The wave of threats from investors is intended to stop others opting to join Deutsche, and is the most hard-line response yet to the breaking of the debt-market code.
Refusing to call the debt means that the hybrid notes effectively become longer term and more risky than the investor originally assumed. Deutsche's decision caused the entire subordinated debt class to be repriced last week.