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Why MNI
MNI is the leading provider
of intelligence and analysis on the Global Fixed Income, Foreign Exchange and Energy markets. We use an innovative combination of real-time analysis, deep fundamental research and journalism to provide unique and actionable insights for traders and investors. Our "All signal, no noise" approach drives an intelligence service that is succinct and timely, which is highly regarded by our time constrained client base.Our Head Office is in London with offices in Chicago, Washington and Beijing, as well as an on the ground presence in other major financial centres across the world.
CONSUMER CYCLICALS
BEL starts to look less attractive vs. some distressed IG (VF) & HY (broader) comp's - some of which have the benefit of having negative basis on CDS (Elo/Auchan 5yr) & some which are on the rise (Avolta/Dufry, Coty). Floor on FV is now +160 for us on Avolta/Dufry's {AVOL SW Equity} (Ba2, BB+;S) 5yr curve.
- We move our floor on FV to Dufry's (now Avolta) 5yr interpolated (no cash bonds beyond the 4yr) which goes through at +160. Its larger scale company with revenue at CHF12.8b, adk. EBITDA of 2.5b and FOCF of 396m. Net financial leverage (core EBTIDA to net debt) dropped to 2.6* from 4.8* (3* pro forma) last year - that effort alongside tight capex expenditure & strong operating performance has led to one-notch (stable outlook) upgrades from Moody's (to Ba2) & S&P (BB+). Avolta still targets deleveraging to 1.5*-2* - Moody's and S&P see that bringing leverage below 4* on their adjusted basis (again to EBITDA). We don't see upgrade in near term.
Poorer fundamental comp's;
- VFC at +193 is IG but has high uncertainty looming over it - including restructuring to boost operating performance & asset sales in near term to raise cash for maturities. We expected Moody's to drop it into HY post earnings earlier this year - seems it will wait on BBB- Neg.
- Elo/Auchan; we've included on purely 5yr CDS basis still at -40 (we flagged as cheap at -83 - has been on a one way mover tighter since). Its also a private equity issuer that is single rated.
Why MNI
MNI is the leading provider
of intelligence and analysis on the Global Fixed Income, Foreign Exchange and Energy markets. We use an innovative combination of real-time analysis, deep fundamental research and journalism to provide unique and actionable insights for traders and investors. Our "All signal, no noise" approach drives an intelligence service that is succinct and timely, which is highly regarded by our time constrained client base.Our Head Office is in London with offices in Chicago, Washington and Beijing, as well as an on the ground presence in other major financial centres across the world.
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