Equitable completes euro FA-backed debut

3 min read
EMEA

Equitable Financial Life Global Funding sold its first funding agreement-backed euro deal on Thursday as Macif gave an update on its upcoming multi-tranche subordinated trade.

Equitable's bond, expected A2/A+ by Moody's/S&P, is its first euro off an FA-backed note programme established in June 2020 and follows a series of US dollar outings in the format.

The US insurer was following in the footsteps of compatriots MetLife, New York Life, and Athene, which have all offered FA-backed euros to diversify from home-currency funding.

Leads Credit Suisse, JP Morgan and Societe Generale marketed the seven-year at IPTs of swaps plus 85bp area for an expected €500m size.

Guidance followed at 75bp area with the size confirmed at €500m on the back of more than €675m of orders.

With the book falling slightly to €650m-plus, the spread was set in line at 75bp.

Bankers said the modest demand reflected FA-backed trades still being seen as a relatively niche product in Europe, and that as a debut issuer, Equitable would need time to build a following among European accounts. Some suggested demand may also have been affected by the deal launching on the day of a European Central Bank meeting.

The debut positions Equitable back from MetLife and NY Life, but inside Athene, which trades at the wide end of the sector.

MetLife's €500m 0.55% June 2027s were bid at 30bp over swaps on Thursday, with NY Life's €800m 0.25% January 2027s at 37bp, according to Tradeweb figures. Athene's €500m 0.625% January 2028s were at 94bp.

Goldman Sachs also crossed the Atlantic on Thursday, visiting the sterling market with a £900m two-part senior holdco offering.

The deal comprised a £500m 4.5NC3.5 at 95bp over Gilts and a £400m 9.5-year bullet at 115bp.

It is Goldman's second sterling foray this year, following a £750m long six-year in March.

Macif in the queue

Back in the insurance space, France's Macif will complete its roadshow on Thursday for a potential three-part subordinated offering, set to feature an expected €400m Restricted Tier 1, a benchmark Tier 2 and/or a benchmark Tier 3.

The deal, aimed at partly financing the acquisition of Aviva France by Macif's Aema Groupe, is expected to launch early next week in a combined €1.75bn size.

In an update on Thursday afternoon, the issuer set out its maturity preferences: a perpetual non-call eight RT1, a 31NC11 Tier 2, and a six-year Tier 3.

Macif has few bonds outstanding and last tapped the market in October 2014, according to IFR and Tradeweb data, selling a €124m perpetual non-call 2024 RT1.

The acquisition of Aviva's French business, which will make Aema Groupe a top-five player in the French insurance market, means investors are now being offered a very different proposition.

"It's being seen pretty positively in terms of being a low beta, solid balance sheet, good metrics name with some scale and a decent spread of business mix," said a lead banker.

"I think investors are genuinely quite excited to see something forward-looking in terms of future issuance - it's not going to be a one-off."