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Commerzbank’s Euro AT1s Jump on Stake Purchase by UniCredit
September 16, 2024
Commerzbank’s EUR-denominated AT1s jumped by 1-2 points after UniCredit purchased a 9% stake in the bank earlier last week. The move came as a surprise to the German government, which was selling Commerzbank shares via an overnight placing. German authorities have held talks with Unicredit as the purchase could mark a significant development in the potential acquisition of one of Germany’s largest banks by a foreign institution. According to government sources, it was up to the banks to decide what they wanted and that the German government was not in principle against a tie-up, but acknowledged Commerzbank’s opposition. Unicredit CEO Orcel said that ‘all options are on table’, including reducing the stake. With bets of takeover going through, Commerzbank’s shares gained by over 20% over the last week and its AT1s have rallied.
Its EUR 4.25% Perp gained 2.1 points over the last 2 days to trade at 93.2, yielding 6.79%. Besides, the yield gap between comparable AT1s of Commerzbank and UniCredit has narrowed to 60bp. For instance, there has been a 120-130bps tightening between Commerzbank’s 4.25% Perp and UniCredit’s 4.45% Perps that currently yield 6.79% and 6.21% respectively.
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