Decompression Trades:Buy ERSTBK 4 01/16/31 (SP) vs FRLBP 4 ⅜ 01/17/30 (NPS)Buy SANTAN 3 ¼ 05/27/32 (SP) vs ACAFP 0 ⅞ 01/14/32 (NPS)Buy DB 3 ¾ 01/15/30 (SP) vs SOCGEN 2 ⅛ 09/27/28 (NPS)

We view Decompression Trades as a key theme for European Banks bonds in a market where we see very tight spreads coupled with growing uncertainties going into H 2- 25 , in particular with a French political risk that should be one of the main headlines in the fall 2025. In that respect , we like three trades mentioned above as they offer the opportunity to 1) gain seniority in the capital stack, 2) improve ratings , 3) lower the sensitivity to French risk . In terms of fundamentals, we looked for major banks in core European countries with credit profiles that are relevant against their French counterparts that we play as the short leg . We target minimal spread and yield concessions a s well as minimal extensions.