BNP Paribas launched a euro-denominated AT1 with a call at 7.25 years (6 December 2029) at initial price thoughts of 7% area. BNPP has predominantly raised its AT1 capital in the US dollar market in recent years. Earlier in August, it sold a USD 2bn non-call seven AT1 with a 7.75% coupon; in January, it issued a USD 1.25bn non-call five trade with a 4.625% coupon.

“Scope’s issuer rating on BNP Paribas reflects a number of factors. Superior product and geographical diversification translates into material, resilient and sustainable earnings; BNPP is a pan-European market leader with global ambitions in CIB and wealth management,” said Nicolas Hardy, lead analyst. “The group manages capital buffers well above minimum regulatory requirements (but more tightly than peers); and continues to invest to improve cost efficiencies and strengthen commercial capabilities.”

The group has developed a comprehensive digitalisation and sustainability strategy, where Scope considers the bank to be an early adopter of the most advanced industry standards. This enhances BNPP’s credit standing.

To view BNP Paribas’s subscription rating and rating report, click here.

Commerzbank set the spread of its capped EUR 500m 10.25-year Tier 2 with a call at 5.25 years (6 December 2027) at 430bp over mid-swaps, according to Bond Radar (www.bondradar.com). Initial price thoughts were MS+450bp-460bp. By the end of the European morning session, the book had grown to over EUR 1.4bn and more than 125 investors were involved. In September 2021, Commerzbank sold a EUR500m Tier 2 with a 1.375% coupon, or MS+173bp.

“Commerzbank has a sound domestic franchise in Germany and Poland and has made a good start in implementing Strategy 2024, its transformation programme aimed at improving the revenue base and making ambitious cost savings. Digitalisation objectives still face considerable challenges, however, especially in the Corporate Clients segment,” said lead analyst Christian van Beek. “On capital, management plans to maintain the CET1 ratio at 13% at least.”

To view Commerzbank’s subscription rating and rating report, click here.

Bank of Ireland put out initial price thoughts of 480bp-area over UK Gilts for its planned benchmark sterling 10.25-year green Tier 2 offering with a call at 5.25 years (6 December 2027). In May 2021, BoI sold a EUR 500m green Tier 2 with a 1.375% coupon; MS+165bp.

“BoI’s issuer rating reflects the group’s stable and leading domestic franchise complemented by its strategy to strengthen its commercial presence in Ireland and the UK,” said Nicolas Hardy. In the UK, the bank intends to operate with a smaller balance sheet but with more profitable activities.

In Ireland, the bank’s transformation plan to address low interest rates and post-Brexit operating conditions will lead to smaller but more efficient operations.

Asset quality has improved materially in recent years thanks to supportive economic conditions and the active management of legacy NPEs. BOI displays supportive prudential metrics; its capital adequacy is a rating strength.

To view Bank of Ireland’s subscription rating and rating report, click here.

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