While the UK Parliament has to sign off on the Brexit agreement, bank credit rallies after Boris Johnson reached an agreement with the EU.
U.K. lenders’ riskiest notes jumped, leading a credit rally, after Prime Minister Boris Johnson reached a Brexit agreement with the European Union.
Barclays Plc’s 1.25 billion pound ($1.6 billion) 5.875% CoCo reversed earlier losses and hit 99.5 pence on the pound, the highest since May 2018, according to data compiled by Bloomberg.
Nationwide Building Society’s 600 million-pound perpetual bond, sold last month, hit a record. Oddly, NBS’s perpetual bond started rising on October 10th, well before PM Boris Johnson announced his Brexit agreement.
A contingent convertible bond (CoCo), also known as an enhanced capital note (ECN) is a fixed-income instrument that is convertible into equity if a pre-specified trigger event occurs.
A famous CoCo bond is the Deutsche Bank 6% Perpetual.
While issued at par (100), the G-spread on the Deutsche’s 6% CoCo bond is … 11%.
Odd, that DB’s CoCo bond remained relatively calm after the Brexit deal was announced.
Is that UK PM Boris Johnson or Martin Kernsten, the Nipple King from Parks and Recreation?