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2022/12/07 / Erste Group Research

Credit markets in wait-and-see mode

The direction of risk premiums is currently mixed. Positive impetus could come from the slight easing of the tough zero-covid measures in China. In addition, investors' eyes are on the ECB meeting on December 15. We expect a rate hike of 50 basis points.

After commercial real estate developer Aroundtown cancelled a hybrid bond redemption at the first possible call date last week, the hybrid sector came under pressure. If the "extension risk" in the real estate sector were to rise, this would be reflected in the debt of real estate groups. By not repaying the hybrid bonds, the companies could risk losing equity recognition from the rating agencies. Among the three Austrian real estate companies we cover (CA Immo, S Immo and UBM), only UBM has two outstanding hybrid bonds. The market currently clearly assumes redemption.

Special Topics of the Week:

- Covered Bond Outlook 2023

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General information

AuthorErste Group Research
Date2022/12/07
Languageen
Product nameCredit News
Topic in focusCredits/ Corporate bonds
Economy in focusAustria, Eurozone
Currency in focusEuro
Sector in focus-
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