visimoney
TLDR:
In a trend driven by investor demand, banks are raising senior debt at tighter valuations and with no premiums.
Key points:
- Rabobank raised €1bn with a 10.5-year senior non-preferred bond that was more than six times subscribed despite no concessions.
- NBG and CIBC have also successfully raised senior debt without offering concessions.
Investor demand dictates the success of senior debt issuances even at tighter valuations, according to GlobalCapital. The trend of banks raising senior debt at no premium exemplifies this, with Rabobank, NBG, and CIBC all successfully raising senior debt without offering concessions.
Rabobank recently raised €1bn through a 10.5-year senior non-preferred (SNP) bond that was more than six times oversubscribed, despite offering no concessions. This demonstrates that investor demand for senior debt remains strong, even in a market with tighter valuations.
Similarly, National Bank of Greece (NBG) and Canadian Imperial Bank of Commerce (CIBC) have also recently raised senior debt at no premium. This trend highlights the importance of duration and spread demand in investor decision-making for senior debt issuances.
The success of these senior debt issuances without concessions suggests that investors are willing to invest in senior debt even with tighter valuations. This indicates confidence in the creditworthiness of the issuing banks and their ability to service their debt obligations.
Overall, the trend of raising senior debt at no premium emphasizes the importance of investor demand and market conditions in determining the success of debt issuances. Despite tighter valuations, investors continue to show interest in senior debt, providing banks with opportunities to raise capital at favorable terms.
