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Coty continues tightening this morning - WOW28's Look Cheap

CONSUMER CYCLICALS

Only clear view we came out with from yesterday's earnings was the single {WOW AU Equity} Sus Nov 28's at €85/Z+110. Has 30-40bps of potential tightening for its rating (Baa2, BBB; Stable), trades +25 wide to single Pandora despite grocery staple vs. discretionary. Only colour we have from Aussie desks is lack of investor awareness (roadshows etc. given single name) on the staple. It's $ CDS; {WOWAU CDS USD SR 5Y D14 Corp}

Coty {COTY US Equity} (Ba2 Pos, BB+ Pos, BB+ Pos); €26/28's 11-12bps (moved tighter yest. arvo, mids moving tighter agian this morning)

Beats on 2Q & affirms FY24 EBITDA & CY24/25 leverage targets. Coty €26/28's reversed wider earlier this year, the 5.75% 28's at G+209 still offers value in a uplift into IG which seems on track. For yield investors the 26's may look more attractive (€ rates 2s4s is -33bps) at 4.1%/€99.5. (see full note from yesterday)

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