MNI China Daily Summary: Wednesday, November 20

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CHINA PBOC CONDUCTS CNY302.1 BLN VIA 7-DAY REVERSE REPOS WEDS

MNI: EUROZONE SEP CONSTRUCTION OUTPUT -0.1% M/M, -1.6% Y/Y

MNI: GERMANY OCT PRODUCER PRICES -1.1% Y/Y

MNI: UK OCT CPI +0.6% M/M, +2.3% Y/Y

AUSTRALIA: 2025 Election Outcome Looking More Uncertain According To Newspoll

MNI EXCLUSIVE: German Turmoil Dashes EU's Joint-Funding Hopes -Officials

FED: Powell's Time Looks Up, Replacement Could Be Less Willing To Cut Rates?

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BASIC INDUSTRIES: Anglo American (AALLN Baa2/BBB*-/BBB+): Coal Sale Progressing

BASIC INDUSTRIES
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  • AFR reported overnight that bidders for Anglo’s coal assets have been narrowed down to 6 and will only accept bids for the entire portfolio.
  • The original $5bn valuation has been impaired by the recent fire at the Grosvenor mine. Bids are now expected above $3bn with $700mn in rehabilitation costs absorbed.
  • The valuation difference will be negligible for credit with less than 0.2x turns difference in leverage. Shareholder returns are expected in any event.
  • Recent reports have also speculated that BHP is expected to re-bid for Anglo after November when it is allowed to do so again.

  • AALLN spreads remain underpinned by a takeover premium, 0-5bp wide to GLENLN (A3/BBB+/NR) despite the ratings differential.

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  • AFR reported overnight that bidders for Anglo’s coal assets have been narrowed down to 6 and will only accept bids for the entire portfolio.
  • The original $5bn valuation has been impaired by the recent fire at the Grosvenor mine. Bids are now expected above $3bn with $700mn in rehabilitation costs absorbed.
  • The valuation difference will be negligible for credit with less than 0.2x turns difference in leverage. Shareholder returns are expected in any event.
  • Recent reports have also speculated that BHP is expected to re-bid for Anglo after November when it is allowed to do so again.

  • AALLN spreads remain underpinned by a takeover premium, 0-5bp wide to GLENLN (A3/BBB+/NR) despite the ratings differential.