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SocGen raised $1.25bn via a PerpNC5.5 AT1 bond at a yield of 10%, 50bp inside initial guidance of 10.5% area. The junior subordinated notes are rated Ba2/BB/BB+. The coupons are fixed until the first reset date of 14 May 2029, and if not called, the coupons reset to the US 5Y Treasury plus 544.8bp then and every five years thereafter. The offering comes shortly after it announced the repayment of a $1.75bn Perp and having also redeemed a $1.25bn note in August. SocGen also has two AT1 bonds, with their first call dates next year. This is the first European bank AT1 since BBVA’s 9.375% Perp issued in September. While the issuance offers a double digit coupon, the yield-to-call (YTC) is comparable with other European bank AT1s that have a lower coupon. In the chart below, we have plotted SocGen’s new 10% Perp alongside comparable European bank AT1s to assess relative value.
Hover over the dots in the chart to view the YTC, price, coupon reset, call date and issue rating