The TwentyFour Blog
RT1s in vogue once again as issuance bounces back
NN Group, the Dutch insurer, has issued its inaugural €750m Restricted Tier 1 (RT1) deal, which came with a 6.375% coupon and BBB-/BBB rating from S&P/Fitch.
One year on from the collapse of Credit Suisse - and what a year it has been for AT1s
Almost a year ago to the day, we were in the midst of banking sector turmoil, which started off with regional banks in the US and spilled over to Europe, eventually culminating in the forced merger between Swiss banks UBS and Credit Suisse.
Green waves down under: Australia's journey with sustainable RMBS
Much like the European market, Australian ABS has started 2024 with considerable momentum, with over AU$12bn in issuance year-to-date and a significant pipeline building. But how are its green credentials?
The latest insights on leveraged loans and their impact on CLOs
Last year was a volatile year for global markets but also one where economies performed better than expected. If we look at the leveraged loan market, last year was characterised by a surge in so-called amend and extend (A&E).
The UK’s data rollercoaster: recession confirmed, inflation eases, and consumers rebound
Last week's data deluge from the UK painted a mixed picture for the economy, offering insights into inflation, growth, and the possible path for interest rates.
Shelter component exposes the Fed's ‘last mile’ battle with inflation
The January US consumer price index (CPI) data came in stronger than expected with core month-on-month figures coming in at 0.4 % (0.3% expected) and year-on-year figures at 3.9% (3.7% expected) but unchanged from December’s 3.9% print.
US Credit shows healthy supply and demand dynamics
US corporate bond primary markets have had a robust start to the year as both Investment Grade (IG) and High Yield (HY) companies have looked to take advantage of the recent rally in rates and spreads that we have experienced since Fed Chairman Powell's December FOMC comments up until his more cautious stance in the January meeting.
Next week’s CPI numbers will provide more clues on rate cuts
Next week markets will receive January Consumer Price Index (CPI) inflation prints from the US and the UK, which will no doubt be widely followed. In the US, the Bloomberg consensus is for a significant drop in headline CPI from 3.4% to 2.9%, while core is expected to decline by a less spectacular 20 bps from 3.9% to 3.7%. For the UK, consensus is for a small increase in CPI inflation from 4.0% to 4.1%.
Issuer calls drive AT1 spread compression
A few weeks ago, JP Morgan skipped a call on one of its $1,000 par preference shares (“US Prefs”). The perpetual notes had a coupon of 6.75% payable until Jan’24, with a subsequent reset of 3-month SOFR + 404bps. Post the non-call, the coupon changed to 9.35% and will continue to reset every 3 months.
‘Let’s be honest, this is a good economy’: the Fed’s comments unpicked
Yesterday was an eventful day for markets. We started off with inflation data in Europe, followed by an earnings release by New York Community Bank that showed large provisions in their commercial real estate loan book, before moving onto the Fed’s Federal Open Market Committee meeting
Explained: How floating rate bonds might behave if the BoE cuts rates
Low interest rates feel like a lifetime ago, but it was only in June 2022 that the Bank of England increased the base rate to 1.25%, the first time it moved above 0.75% since March 2009.
PCE data brought something for everyone
The long-awaited Personal Income and Outlays report for December was released last Friday. This piece produced by the U.S.’ Bureau of Economic Analysis contains information about personal income, savings rates and very importantly the Personal Consumption Expenditures (PCE) price index, the Fed’s preferred inflation gauge of the economy.