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Alstom (Baa3 Neg): Senior Valuations

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  • Alstom’s balance sheet repair continues, with the hybrids announced at FY results now at roadshow.
  • One interesting side effect from that issuance; it looks like the company might solicit an S&P rating to comfort hybrid investors (Moody’s does not revoke equity credit for non-call). This wasn’t made explicit, but the docs feature a lower step at 10.25 years if it has a solicited IG rating from S&P before the first reset.
  • ALOFP bonds have been a top performer over the past month (-22bp vs -9bp for BBB- Industrials), driven by the announced balance sheet measures and Moody’s signalling the outlook will move to stable upon execution.
  • ALOFP cash is left towards the tight end of BBB- industrials. We had been constructive on Alstom credit since the signalling asset sale gathered momentum; valuation looks closer to fair now.

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  • Alstom’s balance sheet repair continues, with the hybrids announced at FY results now at roadshow.
  • One interesting side effect from that issuance; it looks like the company might solicit an S&P rating to comfort hybrid investors (Moody’s does not revoke equity credit for non-call). This wasn’t made explicit, but the docs feature a lower step at 10.25 years if it has a solicited IG rating from S&P before the first reset.
  • ALOFP bonds have been a top performer over the past month (-22bp vs -9bp for BBB- Industrials), driven by the announced balance sheet measures and Moody’s signalling the outlook will move to stable upon execution.
  • ALOFP cash is left towards the tight end of BBB- industrials. We had been constructive on Alstom credit since the signalling asset sale gathered momentum; valuation looks closer to fair now.