EM LATAM CREDIT: Mexico's Retailer Liverpool (LIVEPL; NR/BBB/BBB+) 1Q Earnings

SONIA FIX - Source: BBG/ICE

• 1M 4.46560 0.001
• 3M 4.37880 -0.0207
• 6M 4.31290 -0.031
• 12M 4.22620 -0.037

• Medium-dated issuance is expected to see a larger increase, with the median estimate at GBP97bln. This would represent 32.4 % of issuance (30.9% last March, 31.3% outturn when including the upsized syndications). We would once again expect two 10-year syndications in the fiscal year.
• Long-dated issuance is expected to fall back by most with median estimates at GBP51bln which makes up 16.4% of total issuance (down from the 18.5% target a year ago and 20.7% outturn). This bucket has the potential to be upsized through syndications fairly substantially, however. We would pencil in at least 3, potentially 4 long-dated syndications, but see little issuance longer than 30-years.
• Linker issuance is also expected to reduce, to a median of GBO30.5bln (10.0% of total). This would be down from the originally planned 10.9% (11.5% outturn).
• A number of analysts are also arguing for a larger-than-usual unallocated bucket. Estimates here range from GBP10.5bln through to GBP28.0bln with the median expectation at GBP16.6bln. This would be considerably higher than the GBP10bln seen in the 2024/25 fiscal year.
• T-bill estimates range from an unchanged stock to the end 2024/25 level to a GBP11bln increase, with the median at GBP5bln. NS&I funding is expected to remain broadly consistent with 2024/25’s GBP9.5bln level.

• From the 12 sellside Spring Statement previews that we have read, expectations for the gilt remit range from GBP292bln through to GBP321bln, with a median expectation of GBP303bln (which we estimate is not far off where 2024/25 will end up due to the overfunding from the large syndications towards the end of the current fiscal year).
• See the table below for full estimates.
• Short issuance is expected to be larger than in the current fiscal year. Short issuance exceeded the Autumn Budget forecast, largely due to the tenders for the 0.125% Jan-26 gilt (which will mature in the upcoming fiscal year and hence has added to the funding needs for2025/26). Only the lowest estimates expect short issuance at similar to the current fiscal year (around GBP100bln) with estimates ranging up to GBP120bln. The median estimate equates to 36.1% of total issuance – which isn’t that far from the initial 35.9% seen last March. But we note that against expectations, the DMO reduced the proportion of short issuance intended at the time of the Autumn Budget to 34.6% (although as we note with the tenders we estimate the outturn around 36.5%). With the DMO being flexible with tenders (and including the short-end of the curve for potential tenders) at least some of the unallocated bucket could be used for tenders.