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Amcor (AMCR Baa2/BBB): New Issue Pricing Thoughts

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  • AMCR has only one € outstanding (27s) but has a $ curve. AMCR $ trades ~5bp wide to SKGID (Baa3/BBB-/BBB- all positive watch) and up to ~25bp wide to JCI (Baa2/BBB+).
  • AMCR € 27s trade ~15 wide to JCI, ~5 wide to SKGID curves.
  • Beyond the front end SKGID € look artificially tight, so we revert to JCI for RV. We would peg 8Y AMCR FV in the MS+120-135 range, 20-35 wide to the JCI curve.
  • That would put AMCR in line with STERV (Baa3/NR/BBB-) and slightly wide to VLTO (Baa1/BBB), consistent with $ pricing.
  • We will update our thoughts post roadshow and IPT. Thoughts welcome as always.
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  • AMCR has only one € outstanding (27s) but has a $ curve. AMCR $ trades ~5bp wide to SKGID (Baa3/BBB-/BBB- all positive watch) and up to ~25bp wide to JCI (Baa2/BBB+).
  • AMCR € 27s trade ~15 wide to JCI, ~5 wide to SKGID curves.
  • Beyond the front end SKGID € look artificially tight, so we revert to JCI for RV. We would peg 8Y AMCR FV in the MS+120-135 range, 20-35 wide to the JCI curve.
  • That would put AMCR in line with STERV (Baa3/NR/BBB-) and slightly wide to VLTO (Baa1/BBB), consistent with $ pricing.
  • We will update our thoughts post roadshow and IPT. Thoughts welcome as always.
Keep reading...Show less