Trade Idea

ENBCN 5.5% 2077 Get Rich vs TRPCN 5.3% 2077

BUY

TRPCN 5.3 03/15/77

US89356BAC28
SELL

ENBCN 5 1/2 07/15/77

US29250NAS45

Tightening in Enbridge 5.5% 2077 (ENCBN 77's) makes the bonds look expensive against Transcanada Trust 5.3% 2077 (TRPCN 77's). TRPCN 77's have on average traded 68bps tighter than ENCBN 77's over the LTM and currently trade 14bps wider (3.5 standard deviations). Holders of ENCBN 77's have the opportunity to take profits at 302bps and switch into TRPCN 77's at 317bps, increasing carry in a risk neutral trade with 87bps of reversion potential.

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