Nordea: Go for pick-up via maturity extensions in Finnish bonds
October 22, 2012
State Treasury Finland will simultaneously re-open RFGB 1.625% Sep 2022 and RFGB 2.625% Jul 2042 on Tuesday, 23 October 2012.
With short rates virtually at zero, the search for pick-up is definitely on. In this market, Finnish bonds offer excellent opportunities, offering safety coupled with pick-up over German bonds without making big sacrifices in terms of credit quality.
The pick-up offered by 10-year Finnish bonds looks good, no matter whether one looks at yields, asset swap spreads or the spread vs. Germany. The pick-up increases in the 30-year sector in both yield and asset swap terms, but the spread vs. Germany is narrower in RFGB 2042.
Please refer to research area for a full commentary by Nordea's Jan von Gerich.
The results of the auction are to be published in the corresponding section of EU.Cbonds.
Issue — Finland, FGB 1.625 15sept2022
Country of riskFinland
Redemption (put/call option)
М/S&P/F— / — / —
Company — Finland