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  1. #1
    Junior Member D B Cooper's Avatar
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    Default Crédit Agricole S.A. - CASHA

    Hi

    Anybody concerned about the Credit Agricole bonds - CASHA now selling at 87% of par. The market seems to be discounting them for fear over their Greek exposure

    Any comments or views on how the Greek/Euro situation could/will impact them. CA look to have significant Greek exposure through their investment in Emporiki Bank




  2. #2
    Member Snapper's Avatar
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    I think the market has been discounting them for a while because they're perpetual and the interest rate reset doesn't look great.

  3. #3
    Junior Member D B Cooper's Avatar
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    Default CA v ANZ

    Thanks for your reply Snapper, but look at these two bonds

    ANBHA – ANZ Bank
    Perpetual, unsecured, deeply subordinated bonds
    Credit Rating A+
    Current Coupon Rate 9.66%
    Reset Date 18 April 2013
    On the 18th of April 2013, if not called, the coupon rate will be reset for a further 5 years at the then 5yr swap rate plus the issue margin of 2.00%
    Current reset if done today – 4.35+2.00 = 6.35%
    Current price: 107

    CASHA – Credit Agricole
    Perpetual, unsecured, deeply subordinated notes
    Credit Rating A
    Current Coupon Rate 10.035%
    Reset Date 19 December 2012
    On the 19 December 2012, the coupon rate will be reset for a further 5 years, until 19 December 2017, at the then 5 year swap rate plus the Issue Margin of 1.90%
    Current reset if done today – 4.35+1.90 = 6.25%
    Current price: 86

    Both Perpetual, unsecured, deeply subordinated notes, one with A rating and 10.04%, the other with A+ and 9.66%, resets within 4 months of each other and reset 0.10% different
    People are much more trusting of ANZ than CA – I would say one is overvalued and the other undervalued

    Comments?

    DISC – I hold both

  4. #4
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    Quote Originally Posted by D B Cooper View Post
    Thanks for your reply Snapper, but look at these two bonds

    ANBHA – ANZ Bank
    Perpetual, unsecured, deeply subordinated bonds
    Credit Rating A+
    Current Coupon Rate 9.66%
    Reset Date 18 April 2013
    On the 18th of April 2013, if not called, the coupon rate will be reset for a further 5 years at the then 5yr swap rate plus the issue margin of 2.00%
    Current reset if done today – 4.35+2.00 = 6.35%
    Current price: 107

    CASHA – Credit Agricole
    Perpetual, unsecured, deeply subordinated notes
    Credit Rating A
    Current Coupon Rate 10.035%
    Reset Date 19 December 2012
    On the 19 December 2012, the coupon rate will be reset for a further 5 years, until 19 December 2017, at the then 5 year swap rate plus the Issue Margin of 1.90%
    Current reset if done today – 4.35+1.90 = 6.25%
    Current price: 86

    Both Perpetual, unsecured, deeply subordinated notes, one with A rating and 10.04%, the other with A+ and 9.66%, resets within 4 months of each other and reset 0.10% different
    People are much more trusting of ANZ than CA – I would say one is overvalued and the other undervalued

    Comments?

    DISC – I hold both
    A few days ago Moodys downgraded Credit Agricole's credit rating because it has a lot of loans in Greece. Market is usually right! CASHA is not as safe as before.

  5. #5
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    Greece vote:

    "Numbers now out. Papandreou wins the confidence of the government. 155 MPs voted yes, four more than the 151 the prime minister needed - a majority in the 300-seat parliament."

    CASHA price should have reached the bottom. I would be surprise if the price recovers a few cents this week.

  6. #6
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    HY Results announced

    Net income of Credit Agricole S.A. in Q2 was 339 m Euro, much better than analysts forecasted (187 m Euro). Share price increased by 5%.

    At 10% interest rate, CASHA looks cheap at 60 cents (comparing with 60 cents of IFTHA paying 5% interest). It's hard to believe Infratil would be more reliable than Credit Agricole S.A. (a major bank in France) in terms of revenue and profit.

  7. #7
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    Default Interest payment

    I found that interest payment to CASHA note holders would be made on September 19.

    The HY financial review released to NZX this morning shows (on page 100) that Credit Agricole S.A. have 7.377 billion euros of deeply subordinated notes (on June 30) which include NZ$250m CASHA notes. I have NOT found any announcement that interest payment to these 7.377 billion notes would be suspended.

    I think some analysts worried about interest suspension or haircut (to notes) too much and too earlier.

    CASHA is traded at 44 cents today, much lower than the price for similar notes on European markets.

  8. #8
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    The price of CASHA notes jumped from $0.43 on Monday to $0.50 now.

  9. #9
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    Not really into Credite Agricole.. Just spotted this thread in passing.. I do know that they are in a little bit of trouble...

    Check out Credite Agricole and Emporiki Bank.. !!..

  10. #10
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    Looser Basel rules boost European banks
    http://www.ft.com/cms/s/0/405d4be6-5...#axzz2HKS2H3ac

    CASHA becomes much safer than a few months ago. At the interest rate of 5.04% p.a. and current price of 54 cents for a dollar, the annual return (5.04/0.54 = 9.33%) seems attractive and potential to get back $1/bond in 2017 is even more attractive.

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