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Anglo American (BBB/Baa2): New Issue FV Analysis

BASIC INDUSTRIES
  • IPT: EUR Benchmark 5.25Y MS+145 Area, EUR Benchmark 8Y MS+185-190.
  • We see FV in the low 100s / low 140s.
  • AALLN was downgraded one notch by S&P last week with little spread reaction. With the China slowdown story dragging on commodity prices, we remain cautious on the credit. Spreads already sit ~20bp wider from the tights of last month, but still ~20bp tighter YTD.
  • We prefer the 8Y over the 5.25Y subject to final terms. In the belly of the curve AALLN trades flat to GLENLN (Baa1/BBB+), while long end spreads look closer to fair pricing.

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