Still like the dated cocos
We like dated contingent capital and take the opportunity to reiterate our Overweight recommendations on the Credit Agricole 8.125% and UBS 4.75%, and upgrade Barclays 7.75% to Overweight. With their 2018 calls, we find the short time to redemption attractive at this point. Relative value is also attractive, in our view. We like securities where the bank is heavily incentivised to redeem as here: there is no real spot for T2 cocos in the regulatory capital architecture today. Thus, these banks, all with pristine track records in terms of calls by the way, should we think replace either with cheaper T2 (Barclays, CredAg) or with senior TLAC (UBS). The proximity to the call should also anchor valuations, we think.