全球-信贷市场-巴黎银行月度信贷会议：这个信贷周期还将持续更长时间.docx

BNPP Monthly Credit CallThis Credit Cycle has Longer to RunViktor Hjort - Global Head: Credit StrategyCarlo Mareels - Senior Analyst: European BanksTimothy Rea - Senior Analyst: European AutosVIKTOR HJORT, CARLO MAREELS, TIMOTHY REA CREDIT STRATEGY AND TRADING DESK ANALYSTSCORPORATE & INSTITUTIONAL BANKINGBNP PARIBASFebruary 2019The bank for a changing worldTHIS IS MARKETING MATERIAL FROM THE CREDIT STRATEGY & TRADING DESK ANALYST TEAM AND IS NOT RESEARCHSource all charts: BNP ParibasEuropean Bank AT1s: Extension Risk Limited1010The bankfbr a changing world2019 AT1 calls, extension risk limitedSource: Markit, Bloomberg, BNP ParibasSECURITY_NAMEPx_lastflt_spreadYAS_ZspreadBack end - z spreadissue_dtNxt Call Dtcall_featureyld_YTC_MIDyld_ytm_midChange Year To Date Net (Realtime)crncyBBVASM 7 PERP100.179616-6768219/02/201419/02/2019Anytime1.911.910.25EURSANTAN 6 1/4 PERP97.9055412439-189812/03/201412/03/2019Quarterly27.525.692.70EURKBCBB 5 5/8 PERP100.603476-6353919/03/201419/03/2019Quarterly0.330.330.79EURSANTAN 6 3/8 PERP98.5479908-42919/05/201419/05/2019Quarterly11.777.502.99USDNWIDE 6 7/8 PERP100.96248824324511/03/201420/06/20195 years4.186.110.01GBPLLOYDS 7 PERP100.4650639111501/04/201427/06/20195 years5.786.320.51GBPVIRGMN 7 7/8PERP101.10557935822131/07/201431/07/2019Quarterly5.547.022.03GBPBACR 6 1/2 PERP100.96958844614117/06/201415/09/20195 years4.875.993.32EURBACR 6 5/8 PERP99.67650238311917/06/201415/09/20195 years7.177.632.11USDBACR 7 PERP99.96508545-3617/06/201415/09/20195 years7.106.392.04GBPNDASS 5 1/2 PERP99.7323562688823/09/201423/09/2019Semi-Annual5.936.141.40USDACAFP 6 5/8 PERP100.1247031615418/09/201423/09/20195 years6.427.282.53USDCOVBS 6 3/8 PERP101.32441129311826/06/201401/11/20195 years4.505.362.25GBP14 ATIscomina ud for call in 2019: SANTAN has material extension risk as it needs to refinance the March 2019 call AT1. Current refi conditions are unfavourable; we believe that currently a 7% coupon would be necessary, putting the 6.25% too far out of the money for a call. The bank announced that it would look to issue 1.5bn in hybrids this year. If they manage to do this, they may well call only one of the two AT 1 s coming up for first call in 2019. A non-call of at least one of the SANTANs is already Driced in to a aood extent. We would expect the price to drop a few points upon any evidence that it will not be called but not to less than 94 cents for the 6.25% and then bounce back. The broader imoact on the AT1 market from a noncall by Santander should be muted, in our view. There is already an expectation of a non-call on at least one of the SANTAN AT1s. Peripheral AT1 with low coupons and low back ends are more vulnerable to a orice drop but this should be limited to one or two Doints maximum. These include, RBIAV 4.5%, CABKSM 5.25%, DB 6%, UCGIM 5.785% and perhaps Santan 5.25%, ISPIM 6.25%We view a no deal hard Brexit as a key potential extension driver particularly for the UK AT1s but this is still remote BACR is the bank with the largest notional coming up for redemption in 2019, at eq.4.7bn (c.£4.23bn); the current excess AT1 outstanding is £4.5bn. Lloyds has a significant excess of AT1 as well.11Carlo MareelsBNP Paribas London BranchEuropean Autos: The Beginning of the End1212Production disruption expected to continue this year Global Light Vehicle sales fell 0.5% y-o-y in 2018 Marking the end of an unprecedented 8 year run of growthWe expect Global Light Vehicle sales to fall again in 2019 due to More challenging economic backdrop Trade tensions/tariffs Brexit WLTPi i i i i i i i Rising vehicle costs China weaknessStrong correlation between Light Vehicle sales and production However, the impact on suppliers can be amplified in a downturn due to: Inventory cuts Content cuts (OEMs and customers) OEM pricing pressure The spate of supplier warnings last year illustrated this point and acted as a stark reminder of: Their particular sensitivity to volumes How misleading order books can be H1 19 looks most susceptible to production disruptions Chinese inventory levels remain elevated Europe impacted by WLTP fallout and Brexit uncertainty US expected down in Q119 (but a relative outperformer in H1)On this basis we would expect Suppliers to remain under even greater pressure than the OEMs in upcoming quartersGlobal Light Vehicle sales and production trends25%20%15%10%5%-5%-10%-15%g8zmbin9zoooooooooooo-cmcmrMcmrsicm0086 O O TO O Z Z1clm 寸 un 9 z TTITIIToooooooZCMZZCMCMZ65430-2-3Queue 6TozSource: LMC, Continental, IMF, BNP ParibasAveraae inventory ratio of Chinese automobile dealers2.5 r "2015 2016 2017 2018Inventory remained well abovehistorical levels into year-end。2.AenqwAenuef qEaocuQ <uqE3>0N aqopo 3qE9das IsnQJOnq Source: CADA, BNP ParibasPowertrain suppliers least preferredEV uptake being driven by government policies and encroaching emission regulation Speed of the shift to electrification debatable but already impacting the industry todayPowertrain suppliers to face significant disruption ahead as their addressable market is reduced EVs are relatively simpler to build with only 20 moving parts against some 2,000 in a typical ICE vehicle Differing strategies to tackle the challenge (e.g. M&A, break-up) Hence, we remain particularly cautious on Powertrain suppliers We have a Sell on SchaefflerWe remain selective and defensive in ourpositioning Automated Driving & Connectivity offer opportunities for some But insufficient to offset the current cyclical headwinds Aptiv looks best placed to benefit from these trends Tyre manufacturers should offer a relative safe haven Robust aftermarket outlookAlbeit underlying competitive pressures Prefer premium consumer exposure Pirelli is a top pick However, visibility remains poor and we expect sector sentiment to remain negative overall Hence, despite the recent repricing we retain our Underperform sector recommendationGlobal EV sales forecastsSource: Bloomberg, BNP ParibasSource: Bloomberg, BNP ParibasFuel TankEngineTransmissionExhaustPowertrain suppliers face the biaaest disruptionSource: BNP ParibasMAR linkThis document constitutes a marketing communication and has been prepared by Credit Trading Desk Analysts who work closely with the Sales and Trading function within the BNP Paribas group of companies (collectively <<BNPP) for, and is directed at, (a) Professional Clients and Eligible Counterparties as defined by the recast Markets in Financial Instruments Directive (2014/65/EU) (MiFID II), and (b) where relevant, persons who have professional experience in matters relating to investments falling within Article 19(5) of the Financial Services and Markets Act 2000 (Financial Promotion) Order 2005, and at other persons to whom it may lawfully be communicated (together “Relevant Persons”). 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