Halister News

(Bloomberg) -- President Donald Trump’s picks to head banking agencies (OCC, FDIC, Fed) will probably allow bank mergers to close even if there are pending Bank Secrecy Act/Anti-Money Laundering (BSA/AML) issues, likely encouraging more bank M&A, which may boost regional banks, Cowen’s Jaret Seiberg writes in note.

• Sees BSA/AML compliance as biggest obstacle to bank M&A, with fixes for problems delaying deals; cites M&T’s troubles as example of "growing problem" administration may be able to address
• Probably won’t benefit mega banks, as they’re large enough to be unlikely to win regulatory approval for acquisitions regardless of BSA/AML issues
• KBW regional bank index (KRX) up as much as 1% while KBW banks (BKX) gains as much as 0.4%, S&P 500 falls as much as 0.1%
• NOTE: FDIC’s Thomas Hoenig, OCC’s Thomas Curry among those scheduled to speak at Institute of International Bankers’ annual Washington conf. today
• Related:
  • Earlier, IBKC, PFBC, RF, ZION Among Banks Poised to Gain From Rate Hike

To contact the reporter on this story: Felice Maranz in New York at fmaranz@bloomberg.net To contact the editors responsible for this story: Arie Shapira at ashapira3@bloomberg.net Steven Fromm

(Bloomberg) -- The key threat to European equity returns is similar to the U.S., spread compression and lack of collateral, JPM analysts Rishad Ahluwalia, Jacob Kurosaki and Heather Rochford wrote in March 10 research note.

• “For total return-benchmarked investors, post-crisis CLO equity prices are the highest they’ve been since 1Q’15, and the investment profile is evolving into a carry trade with less price upside”
• Investors should also consider relative valuations of B/BB to the extent forecasted equity yields are less attractive in some scenarios
  • “On the other hand, again, CLO equity offers one of the highest levels of upfront carry that is achievable in the region, which has a dearth of high-yielding fixed income opportunities”
• After a volatile first half to last year that saw prices hit lows of 74.64 at the end of February, European CLO equity rebounded and appreciated $12.50, or 16.5%, through to end of the year
  • “In total, post-crisis issued European CLO Equity experienced an 8.8% price return in 2016”
    • Analysis based on sample of up to 119 post-crisis European CLO equity tranches
• “Across a sample of 63 post-crisis issued European CLOs, European CLO Equity total returns came in at an average 32.21%”
  • Of the 63 deals, 30 (48%) are 2014 vintage, 19 (30%) are 2015, 14 (22%) are 2013; 2015 vintage had highest dollar price at the end of 2015

(Bloomberg) -- Orange isn’t in discussions with Bouygues, a spokesman for the carrier said, denying a report by La Lettre de l’Expansion that the companies are close to a telecom deal.

• Orange remains convinced that consolidation will happen at some point in the future: spokesman
• Earlier, La Lettre reported Orange CEO Stephane Richard and Bouygues Chairman Martin Bouygues met early March
• La Lettre de l’Expansion said bankers agreed a value for Bouygues Telecom of around EU10b
• Bouygues spokesman wasn’t immediately available for comment.