Societe Generale 8.25% Perp AT1 SGD

Phillip Bond Desk  |   07 Jul 2022  |    130 views

Societe Generale have just announced the issuance of AT1 subordinated notes at an final price guidance of 8.25%. These bonds will not be callable for 5.5 years. If the bonds are not called on the 15 December 2027, they will be reset at the prevailing 5 years SORA-OIS plus the initial spread and every 5 years thereafter. These bonds comes with a loss absorption feature where in the event if the bank’s Common Equity Tier 1 (CET1) ratio falls below 5.125%, principal amount of the notes will be reduced pro rata with other loss absorbing instruments by the relevant write down amount. These notes have a semi-annual coupon payment with the first coupon payment at 15 December 2022.

 

Societe Generale is a French multinational investment bank and financial services company headquartered in Paris. It is also one of Europe’s leading financial services groups and a major player in the economy for over 150 years. It provides financial service support in 66 countries. The bank operates primarily in French retail banking (30%), international retail banking and financial services (35%) and global banking and investors solutions (35%). Societe Generale has a credit rating of A1/A/A- (Moody’s/S&P/Fitch) and the expected ratings for these issuance is expected to be rated Ba2/BB/BB+ (Moody’s/S&P/Fitch)

 

In 1Q2022, Societe Generale net banking income increase by 16.6% YoY (from €6.24bn in 1Q2021 to €7.28bn in 1Q2022). This was driven by stronger momentum in all operations. Operating expenses increased by 12.2% from €4.74bn in 1Q2021 to €5.32bn in 1Q2022 and this increase was due to the rise in variable costs linked to the growth in revenues, currency effect and the increase in other expenses. This resulted in a positive Jaws effect (gross income growth exceeded expense growth) where the cost of income ratio decreased by 6.9% from 63.3% in Q12021 to 56.4% in Q12022. As at 1Q2022, Societe Generale CET1 ratio stood at 12.9%, leverage ratio at 4.3% with a level of 30.5% of RWA.

Related Articles

MAS announced first sovereign green bond at 3.04%.

For the first time, MAS have announced its first sovereign green bond issuance at an Final Price Guidance of 3.04%

Shawn Sng  |   04 Aug 2022

What are SGS bonds and T-bills?

A relatively safer investment option for newer investor who are looking to explore in the fixed income market.

Shawn Sng  |   26 Jul 2022

Singapore’s Green Bond Framework: Focus on financing a sustainable future

On 9th June 2022, the Ministry of Finance released the SG Green bond framework, which sets out the guidelines for sovereign green bond issuance under the Significant Infrastructure Government Loan Act 2021 (SINGA)

Phillip Bond Desk  |   06 Jul 2022

Disclaimers


These commentaries are intended for general circulation. It does not have regard to the specific investment objectives, financial situation and particular needs of any person who may receive this document. Accordingly, no warranty whatsoever is given and no liability whatsoever is accepted for any loss arising whether directly or indirectly as a result of any person acting based on this information. Opinions expressed in these commentaries are subject to change without notice. Investments are subject to investment risks including the possible loss of the principal amount invested. The value of the units and the income from them may fall as well as rise. Past performance figures as well as any projection or forecast used in these commentaries are not necessarily indicative of future or likely performance. Phillip Securities Pte Ltd (PSPL), its directors, connected persons or employees may from time to time have an interest in the financial instruments mentioned in these commentaries. Investors may wish to seek advice from a financial adviser before investing. In the event that investors choose not to seek advice from a financial adviser, they should consider whether the investment is suitable for them.

The information contained in these commentaries has been obtained from public sources which PSPL has no reason to believe are unreliable and any analysis, forecasts, projections, expectations and opinions (collectively the "Research") contained in these commentaries are based on such information and are expressions of belief only. PSPL has not verified this information and no representation or warranty, express or implied, is made that such information or Research is accurate, complete or verified or should be relied upon as such. Any such information or Research contained in these commentaries are subject to change, and PSPL shall not have any responsibility to maintain the information or Research made available or to supply any corrections, updates or releases in connection therewith. In no event will PSPL be liable for any special, indirect, incidental or consequential damages which may be incurred from the use of the information or Research made available, even if it has been advised of the possibility of such damages. The companies and their employees mentioned in these commentaries cannot be held liable for any errors, inaccuracies and/or omissions howsoever caused. Any opinion or advice herein is made on a general basis and is subject to change without notice. The information provided in these commentaries may contain optimistic statements regarding future events or future financial performance of countries, markets or companies. You must make your own financial assessment of the relevance, accuracy and adequacy of the information provided in these commentaries.

Views and any strategies described in these commentaries may not be suitable for all investors. Opinions expressed herein may differ from the opinions expressed by other units of PSPL or its connected persons and associates. Any reference to or discussion of investment products or commodities in these commentaries is purely for illustrative purposes only and must not be construed as a recommendation, an offer or solicitation for the subscription, purchase or sale of the investment products or commodities mentioned.

?>