Novo Banco SA: Upside after BPCE acquisition

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Novo Banco SA: Upside after BPCE acquisition

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Novo Banco SA

Upside after BPCE acquisition

Rating Change - Credit

Value in senior preferred 11 May 2026

We add coverage on the €3.375% ’31-30 senior preferred bonds at OW. At Z+81bps, the High Grade Credit

bonds look attractive to southern European bank bonds in the BBB range trading 10- Portugal

15bps tighter. BPCE’s acquisition of Novo Banco closed on 30th April, resulting in multi- Banks

notch upgrades. Novo senior preferred is now rated A3 at Moody’s (up by a notch) and Richard Thomas

A- at Fitch (up by two notches). We see up to ~20bps upside on the €3.375%, which is Research Analyst

unusual for senior preferred paper. That still assumes the bonds do not fully converge to BofASE+33 1 8770(France)0291

the curve of its new 100% owner, France-based BPCE (A2/A+/A). We reiterate our OW richard2.thomas@bofa.com

on the €3.5% ’29-28 and €4.25% ’28-27 senior preferreds. We cut the €9.875% ’33-28 Luis Garrido, CFA

Research Analyst

T2s to UW as they now trade close to ~10bps inside the BPCE curve. BofASE (France)

luis.garrido@bofa.com

Ratings upgrades on acquisition by BPCE Katharine Lennon

Fitch’s two-notch upgrade of Novo Banco to A-, a notch below its rating on BPCE, ResearchMLI (UK) Analyst

reflects its view that extraordinary support in case of need from BPCE is highly likely. A katharine.lennon@bofa.com

lack of ratings equalisation is based on Novo being a strategically important but not core

subsidiary of BPCE. Indeed, BPCE had no material operations in Portugal before Novo,

and we estimate Novo’s revenue contribution to be around 5% of BPCE’s. Moody’s one- Exhibit 1: Value in senior preferred

notch upgrade to A3 includes a one-notch affiliate support uplift. Novo Banco bond recommendations

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