|Bid||4.61 x 301500|
|Ask||0.00 x 36100|
|Day's Range||4.5900 - 4.6600|
|52 Week Range||4.2100 - 7.1000|
|Beta (3Y Monthly)||0.75|
|PE Ratio (TTM)||9.63|
|Earnings Date||Jan 25, 2017 - Feb 1, 2017|
|Forward Dividend & Yield||0.30 (6.60%)|
|1y Target Est||6.08|
(Bloomberg) -- When Banco Santander SA skipped a call date on bonds this week, unnerving sentiment in the $340 billion market for risky bank debt, it also highlighted a conundrum that bedevils all CoCo issuers: refinancing them is a lot trickier than for plain-vanilla bonds.
Svenska Handelsbanken AB amassed more than $4.5 billion of bids as it became the first bank to offer new CoCos since Santander rattled markets a couple of days ago. “Whilst Santander’s approach to their AT1 instruments was shambolic, it has not spooked the market,” said Paul Smillie, a credit analyst at ColumbiaThreadneedle.
SA (SAN.MC) is poised to test the riskiest bank debt in the market for a second time in May, potentially triggering a significant repricing of the bonds as investors broadly realize they could be perpetually stuck with this type of banks’ debt. Santander sent shock waves across the Additional Tier 1 market after deciding late Tuesday not to repurchase 1.5 billion euros ($1.7 billion) in perpetual contingent-convertible bonds, known as CoCos, priced at a 6.25% coupon, at their first redemption date on March 12. Investors have traditionally priced CoCos with the expectation that they will be called at the first opportunity and Santander’s mixed communications prior to Tuesday’s deadline led many to think it would do so.
The Spanish bank's 1.5 billion euro ($1.7 billion) contingent convertible bond, or CoCo bond, was eligible for early repayment which is usually exercised in the financial world. Santander's decision this week has left debt investors with a dilemma. Santander SAN-ES 's decision to not repay investors on a special type of bond this week may have surprised investors, but analysts have told CNBC that any fears of financial stress in the market are unfounded.
Spain’s biggest bank, Banco Santander SA, chose to wait until the last available moment to tell holders that it wasn’t going to redeem a particular 1.5 billion euro ($1.7 billion) bond after all. The note in question was a so-called Additional Tier 1 (an AT1 or CoCo for short) and it’s accepted practice in the market to call these bonds on their redemption date.
The rebound may reflect investors shifting focus to CoCos’ large yields and Santander’s capital position rather than the upending of market expectations that banks will call perpetual bonds at the first opportunity. Investors may also see little wider market impact from Santander’s decision due to pricing difference between banks’ CoCos and the fact that the Spanish bank wasn’t reacting to any company or market stresses. The overall cost works out at about 5.53 percent, as the new rate is 541 basis points above the five-year euro swap rate, which is currently 12.5 basis points.
Santander said it wouldn’t redeem a risky kind of bank debt, a move analysts said could ripple across a largely untested corner of the bond market.
The announcement came late Tuesday, right at the deadline for a decision, after the bank kept investors in the dark for weeks regarding the call option and in the aftermath of another deal, a sale of dollar AT1 notes on Wednesday. “The handling of the situation was truly disastrous,” said Timothee Pubellier, a portfolio manager at Financiere de LA Cite SAS, which holds Santander CoCos. The Spanish bank opted against a call due to an “obligation to assess the economics and balance the interests of all investors,” a company spokesman said in an email.
Market shelves in the scruffy Colombian town of Puerto Santander are loaded with Venezuelan maize flour, rice, cheese spread and more, heavily subsidized consumer goods smuggled by government officials and ordinary citizens alike and sold at big mark-ups. Gasoline is ferried from Venezuela too, as people cash in on the arbitrage opportunities created by extreme price distortions. The spectacle of food being spirited out of a country where hunger is becoming epidemic shows in microcosm how Maduro’s socialist government has created an economic and humanitarian disaster.
The Spanish bank’s 1.5 billion euro ($1.7 billion) issue of contingent convertible is trading around 98.5 cents, suggesting investors are still unsure whether Santander will use an option to redeem the notes at par on March 12. Santander must issue a notice on Tuesday if it plans to exercise the call option. A Santander spokesman declined to comment when contacted by Bloomberg News.
February 12, 2019 - Sanofi has appointed Ameet Nathwani, M.D. as Chief Digital Officer in addition to his current role of Executive Vice President, Chief Medical Officer. As Chief Digital Officer, Dr. Nathwani will be responsible for enhancing Sanofi's strategy to integrate digital technologies and medical science to ultimately improve patient outcomes.
While Roberto Campos Neto, whose Senate approval for the leadership post is expected later this month, hasn’t made clear where he might take monetary policy in Latin America’s biggest economy, clues can be found by looking to his grandfather and namesake, Roberto Campos. “Campos Neto was very close to his grandfather, who was his main mentor,” said Alexandre Aoude, a friend of the nominee who used to run Deutsche Bank AG’s Brazil unit.
It would be especially surprising if Santander chose to disappoint bondholders after its separate issuance of a dollar-denominated $1.2 billion AT1 last week, with a 7.5 percent coupon. As Bloomberg News wrote, the sale was timed strangely, with many Asia investors away on the lunar holiday and the book closed before U.S. trading hours. Now this might all be coincidental, but one theory in the market is that European investors have bought into the new dollar AT1 in the hope that their participation will mean the controversial euro note is actually redeemed by Santander.
While most investors expect banks to trigger such options, Santander has so far stayed silent on the subject, raising market tension. Investors price the perpetual bonds on the assumption that banks will voluntarily repurchase notes at the first call date, typically five years after issuance. Why wouldn’t Santander call the notes?
Paris, February 7, 2019 Sanofi delivers 2018 business EPS growth of 5.1% at CER Q4 2018 Change Change at CER 2018 Change Change at CER IFRS net sales.
February 6, 2019 - At its meeting held on February 6, 2019, the Board of Directors duly noted the resignation of Mr. Mulliez and decided, after consultation of the Appointments and Governance Committee, to co-opt Christophe Babule as Director for the remainder of Christian Mulliez's term of office (expiring at the end of the Annual Shareholders' Meeting held in 2022 to approve the financial statements for the fiscal year ending December 31, 2021). The co-optation of Christophe Babule will be subject to ratification by the next Shareholders' Meeting of Sanofi, on April 30, 2019. On November 19, 2018 Christophe Babule has been appointed Executive Vice-President, Chief Financial Officer and member of L'Oréal's Executive Committee as of mid-February 2019.
February 6, 2019 - The U.S. Food and Drug Administration (FDA) has approved Cablivi® (caplacizumab-yhdp) in combination with plasma exchange and immunosuppression for the treatment of acquired thrombotic thrombocytopenic purpura (aTTP) in adults. Cablivi is the first FDA approved therapy specifically indicated for the treatment of aTTP.
Isatuximab Phase 3 trial meets primary endpoint of prolonging progression free survival in patients with relapsed/refractory multiple myeloma Study evaluated the benefit.
February 4, 2019 - The European Medicines Agency's Committee for Medicinal Products for Human Use (CHMP) has adopted a positive opinion for Praluent® (alirocumab), recommending a new indication as an adjunct to correction of other risk factors. Praluent should be used in addition to a maximally tolerated dose of statin or can be used alone in patients intolerant to or inappropriate for statin therapy. The CHMP opinion is based on data from ODYSSEY OUTCOMES, a Phase 3 cardiovascular outcomes trial that assessed the effect of Praluent in 18,924 patients who had an ACS between 1-12 months (median 2.6 months) before enrolling in the trial.
Investors are worried that the giant Spanish lender may take the highly unusual (and unwelcome) step of not redeeming 1.5 billion euros ($1.7 billion) of perpetual bonds in March. Of course, it has a responsibility to its shareholders, but after the debacle around its failed hiring of Andrea Orcel as CEO it’s in need of some good press. Santander should set the right example.
Ana Botín, the executive chairwoman who really runs the Madrid-based bank, may have some egg on her face over the abortive CEO episode, but—more importantly—the bank’s 2018 results released Wednesday bring a successful end to her first three-year strategy. Britain is Santander’s most troublesome business.