SBB - comment
Using the capital received from the Brookfield transaction on bond buybacks is an opportunistic way of reducing the cost of upcoming maturities. The potential €600m in purchases will ultimately be sized around the need to redeem the Feb-2024 bond. The Feb 2024 FRN (€560m outstanding) is trading at 96c/€. We would expect much of the purchases in the auction will target this bond, with SBB picking up other bonds cheaply. SBB has over €700m of proceeds coming in from Brookfield this month and has said it will spend up to €600m on buying bonds in an unmodified Dutch auction.