May 21, 2024 09:43 GMT
Avinor (AVINOR; A1/A S)
TRANSPORTATION
€500m 10Y IPT +105 vs. FV +78 (-27)
**Screens cheap to step up into BBB+ airports (+40bps for 2 notches). ADPFP 7Y pricing -3 though our FV last week and now +4 in secondary might be the cautionary tale for that/this deal.
- Reminder Avinor is Norwegian state-owned co that operates "43 airports" and services "50m passengers annually"; half of which travel to/from Oslo Airport (capital).
- Comps are Schipol (A2/A), the owner & operator of Amsterdam Airport and Aeroports de Paris (NR/A Neg/BBB+), operator of the 3 main airports in Paris.
- Re. standalone ratings; Avinor is Baa2 rated (4 notch uplift), Schipol Baa1 (2-notch) & ADEFP A- on S&P (1-notch).
- Re. Avinor 30s, looks like it has been left well tight - curve is flat even for A-grade (below). Spread over time is messy as well (& names have had rating changes through Covid). We largely ignore it for pricing.
- We don't think final can come inside Schipol 33s (8.9yr) at Z+70 - its equal rated on S&P and 1-notch higher standalone on Moody's - we spread new issue +8bp to it at Z+78. That leaves it above the Schipol curve but fair to us given ADPFP 10y trades at Z+86. We think anything more than 8bps makes the ADPFP look cheap.
- UoP is left broad, we see it as net supply here with only small maturities this year. Front bond is €300m April 25s (at €97.5). Its been 4 years since its last bond issuance.
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