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BNP Paribas raised $1.5bn via a PerpNC5 AT1 bond at a yield of 8.5%, a strong 50bp inside initial guidance of 9% area. If uncalled, the coupon will reset at the first reset date of 14 August 2028 and every 5 years thereafter at the 5Y US Treasury rate plus 435.4bp. The new AT1s have a trigger event when the group’s CET1 ratio is equal to or falls below 5.125%. The bonds have expected ratings of Ba1/BBB-/BBB. This is the first AT1 issue since March, post the historic $17bn AT1 write-off by Credit Suisse. Lloyds Banking Group was the last European lender to issue AT1s in the dollar bond market, raising $1.25bn via a PerpNC7 on March 6.
The juicy yield has seen the AT1s tick higher to 100.75 to yield 8.31% to call. The new Perp offers a new issue premium of 33bp over its older BNP 7% Perp that yields 7.98%. In the chart below, we have plotted AT1s of popular European banks that are all callable in 2028 to gauge relative value of BNP’s new deal. Use the interactive chart to hover over each bond to view details such as their current price, ratings and coupon reset formula.