Free Trial
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.
COMMUNICATIONS
- Capgemini spreads have been performing well in April with their EUR 28s and EUR 29s tightening by close to 20bps, breaking out of a tight range seen since mid-November and outperforming peer bonds.
- Capgemini were upgraded to BBB+[S] by S&P in May 2023 where S&P saw leverage decreasing to 1x in 2023-2024 from 1.4x at FY22 though they were marked negatively on re-leveraging risk given the lack of a clear management commitment and the potential for acquisitions. An upgrade was specifically tied to “a clear commitment to sustain adjusted leverage <1.5x” (or via consistent and sustained outperformance vs. peers).
- While leverage seems to be decreasing in line with S&P expectations (from 0.8x at FY22 to 0.6x at FY23), we aren’t aware of any sign of management committing to a specific level.
- FY results in February were arguably slightly soft with Q4 org revenue growth of ~-1% and a conservative FY24 outlook of ~+1%, Op Margin improvement of 0-30bps and flat FCF.
- In our view, this latest move tighter brings the Capgemini curve to tight levels compared to both the BBB+ EUR Tech curve and similarly rated TMT peers like RELX and Infineon. The Capgemini curve now also trades near/inside the curves of HQ issuers in the less cyclical Telco sector like Orange and Telenor.
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.
We are facing technical issues, please contact our team.
ok
Your request was sent sucessfully! Our team will contact you soon.
ok