Key highlights: - Real estate hybrids have performed very strongly since the beginning of 2024. - Following this rally, the subsegment is trading at relatively compressed levels, although the market backdrop and sentiment has certainly improved. - While the space is no longer super cheap, risks have also reduced, including lower extension/non-call risk. Furthermore, spreads and yields remain elevated relative to many other asset classes. - We highlight three real estate hybrid notes that we thi...
Balder (BALDER) is in the market with a 7-year EUR500m WNG bond today. Initial Price Talk (IPT) at the ms+215bp area looks compelling. We would buy it down to ms+185bp, as spreads look sufficiently attractive compared to peers such as Heimstaden Bostad, Castellum, and Akelius, at those levels. However, we do think the deal may end up pricing tighter than this, as demand could be strong.
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