HALISTER1: COLT 2016-2 Mortgage Loan Trust - DBRS Presale Report

COLT 2016-2 Mortgage Loan Trust - DBRS Presale Report

Alert: HALISTER1
Source: DBR (Dominion Bond Rating Service)

People
Corina Gonzalez (DBRS Inc)
Joseph Ruggiero (DBRS Inc)
Quincy Tang (Dbrs Inc)

Topics
Fixed Income Research
Reports
Deposits Research
Credit Analysis Research
Credit Research

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UUID: 7947283

HALISTER1: MORE: Davivienda Raised to Buy at Citi; Sees 2017 Offering

MORE: Davivienda Raised to Buy at Citi; Sees 2017 Offering

(Bloomberg) -- (Adds analyst name in first sentence, and updates with share move in second.)
  • Lender growing faster than peers, analysts Nicolas Riva, Carlos Rivera and Juan Carlos Arandia write in report.
  • NOTE: Banco Davivienda (PFDAVVND CB) shrs +2% to COP29,780, highest since Dec. 2014
  • 12-mo TP to COP37,000; rating raised to buy from neutral
  • Davivienda EPS estimates for 2016-2018 up 28%, 21% and 19% respectively on stronger loan growth
  • $380m equity offering at end of 2017 should increase Tier 1 capital
  • Grupo Aval raised to neutral; 2016-2018 earnings estimates raised 4%, 6% and 5% on lower operating expenses
    • Increases 12-mo TP to COP1,275
  • Bancolombia mantained at neutral; higher taxes to offset net interest income
    • Increases 12-mo TP to COP32,500
Story Link:NSN OD3530SYF02D
Alert: HALISTER1
Source: BFW (Bloomberg First Word)

Tickers
PFDAVVND CB (Banco Davivienda SA)
BCOLO CB (Bancolombia SA)
AVAL CB (Grupo Aval Acciones y Valores SA)

People
Carlos Rivera (Citigroup Inc)
Juan Arandia (Citigroup Inc)
Nicolas Riva (Citigroup Inc)

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UUID: 7947283

HALISTER1: Sharp BTP Widening Unlikely Even on Italy Referendum No Vote: GS

Sharp BTP Widening Unlikely Even on Italy Referendum No Vote: GS

(Bloomberg) -- Italian sovereign bonds to trade above Spain’s unless any change in opinion polls suggesting the ‘Vote Yes’ camp is gaining ground ahead of Italy’s vote on constitutional reform this year, Goldman Sachs analysts including Francesco Garzarelli write in research note.
  • Goldman assigns a 40% probability to the constitutional reforms being rejected
  • With a low likelihood of early elections even if the ‘No’ camp wins, and with Bank of Italy buying bonds, doesn’t see scope for a material widening in BTP spreads
    • Likely increased political volatility following a ‘No’; the political fortunes and the agenda of the opposition 5SM party would be scrutinized even more closely
      • It wouldn’t be surprising to see Italy temporarily trade as wide as 40bps above Spain, levels not seen since the start of QE; assumes some risk contagion from Italy to Spain leading to a widening of peripheral spreads
  • In such a scenario, the likelihood of successful market- driven recapitalizations of the weaker Italian retail banks would diminish, and chance of a government-led restructuring would increase; government bonds, supported by QE, would suffer less
  • A ‘No’ vote could cast doubt on Italian banking group BMPS’s plans to raise up to EU5b of fresh capital through a rights issue, if the referendum is held toward the end of November; Goldman expects the vote on Nov. 20 or 27
    • Investors may prefer to wait until there is more clarity, with spillover effects to other lenders
  • Sees a 60% probability PM Renzi would be forced to step down were there to be a ‘Vote No,’ hence a 25% probability that Renzi is out of office by early 2017
  • Investors link a 5SM victory with a higher probability of an EU or EMU referendum; Goldman says the possibility of a vote and the probability of a vote to leave the EU or the Euro area appear remote at the moment
Alert: HALISTER1
Source: BFW (Bloomberg First Word)

Tickers
2103Z IM (Republic of Italy)
BMPS IM (Banca Monte dei Paschi di Siena SpA)

People
Francesco Garzarelli (Goldman Sachs Group Inc/The)

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UUID: 7947283