BNP Paribas

Subordinated debt needed to support growth of public sector lender

French senior bank bond market has been 'pretty resilient' though remains 'very sensitive' as liquidity thins

◆ Tuesday tap surprise was pre-funding ◆ Next year’s programme revealed ◆ Historical spreads facing French agencies

◆ Tap was four times covered ◆ No premium required ◆ Spread to mid-swaps attracts

◆ BNPP follows Barclays' lead with A$1bn tier two ◆ Aussie dollar investors 'positioning' into higher yielding debt before rate cuts ◆ Barclays also raises AT1 capital in the region

◆ HSBC's Orion platform used alongside Banque de France’s DL3S solution ◆ No digital premium ◆ Eurosystem's second wave of exploratory work

HSBC leads Yankee charge as banks took advantage of tight spreads to bring forward 2025 funding plans and fulfil some of their riskier commitments

The bank has issued four digital bonds since 2021

◆ Issuers add tier two debt amid lower relative cost to senior layer ◆ Danske Bank prints in euros at no premium as Nordea said to have garnered largest size locally ◆ BNPP, HSBC and Westpac target dollar market

◆ Swap spread moves help issuer's spread to US Treasuries ◆ No-grow deal many times covered ◆ Investors expecting rate cuts turning to short end yields

◆ Deal thought to be KfW's dollar benchmark finale for year ◆ Tight Treasury pricing beats World Bank's 6.9bp record spread ◆ Issuer has no need for a big benchmark

◆ Rarity, tenor and size fuel demand ◆ Big book and dozen dealers make allocations tricky ◆ Next to nothing paid in premium