Category Archives for "Trade Idea Samples"

24th January 2019

Want a nice trade to play SANTAN AT1 call decision? | Trade Ideas

Will they or won’t they?  SANTAN due to make decision on EURO AT1 callable in March 2019

Banco Santander (SANTAN) is due to report Q4 2018 earnings on 30 Jan 2019.   More importantly, for the bank capital market, would be the likelihood of a call decision on their 6.25% EUR AT1 (which is callable on 12 March 19).

Currently it trades with a cash price of €97 and if called at par, it translates to 3 points upside for 6 weeks risk.  But, if they don’t call, these bonds may drop to €90 or a lower cash price area..

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18th January 2019

You want yield but from “Almost safe bank”? | Bank Capital Insights

What yields 8.5% YTC and 6% YTP and is issued by the “most defensive” European bank?

In the land of the high yielding USD AT1s, a number of issues appear very attractive to own given cash prices and recent sell off.  Out of that lot, a couple of issuers stand out given their strong balance sheet, low risk business model and are shielded from most tail risks.  One such name is UBS which reduced the reliance from the volatile FICC units to more stable wealth and asset management businesses.   The UBS 5 Perp 23 AT1 in USD…..

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9th January 2019

Food for Thought Idea in USD AT1 Land | Bank Capital

HSBC 6% Perp 27 AT1 looks very attractive relative to STANLN 6.5 Perp 20 AT1

Macro background:

  • USD swap rates continue to widen especially in the front end and we continue to see the curve flattening
  • Global growth is slowing down but with potential sticky inflation (oil/commodities driven). Trade wars, protectionism and increasing geopolitical risks are going to create volatile moves in markets
  • EM currency and hard currency debt is coming into focus given the record level of issuance in recent years
  • Repricing risks in new issues and new issue markets being shut
  • Potential end of global easing and accommodation
  • Diminishing appetite for risky assets

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