Buy BBVASM 4.875% 36c30 vs SANTAN 5% 34c29
We are positive on BBVASM T2 curve vs SANTAN T2 with a material tightening potential as BBVASM has been trading inside SANTAN in SP as well as in SNP but is lagging in T2. We play the tightening of BBVASM in the T2 callable space by Buying BBVASM 4⅞ 2036 c30 and Selling SANTAN 5 2034 c29. In terms of fundamentals, we do not see any rationale that would justify the underperformance of BBVASM vs S ANTAN in the T2 space. The two banks are the national champions in Spain, with strong credit fundamentals . B oth banks have significant exposures to Latam and BBVASM’s c redit p ro...