EU Close

€IG cash is skewed tighter, iTraxx on track to close -0.7/-3 & rates -5bps in the belly in a low vol day for headline equities, credit & rates. Primary saw 3 corps & is still running at below consensus pace - $IG should move above supply expectations on Bristol's deal.

Consumer Earnings Coming Up tomorrow... Pernod Ricard (Baa1, BBB+, BBB+; S) reports 1H24 results in Euro pre-market - review to come first.

Wesfarmers {WES AU Equity} -1H24 - Single 33's (A3, A-; S); Aus. Session/Euro pre-market- Trades fair for single line - we prefer the WOWAU 28's for Aussie retailer exposure (see last week's note). With leverage (debt to EBITDA) at end of FY23 at 1.9* (down from 2.1* in FY22), EBITDA is expected to increase by ~400m this half (helped by seasonality) & no rating action over the last couple of yrs earnings should be a non-event for credit. Interim dividend forecast is for 89c/share - in line with last yrs. Local markets may look to it for any inflation read through.

Kerry Group {KYGA LN Equity} {KYGA ID Equity} (Baa1, BBB+; S); FY23 Results - Euro pre-market- Curve looks priced fair - its flattened aggressively over the last 3-months (25/31's spread from +100bps to +30) - still b/a 10 wide on the 25's & in-line with equal rated CCHLN 25's leaves us with no view there. Company brought FY guidance down last qtr (due to Dairy Ireland segment) to "low end of 1-5%" and consensus (4 analyst) has adjusted to -0.45% now vs. +1.3% then. EBITDA is forecasted to be flat yoy at ~€1.2b. Net debt was at €1.8b in Q3, down from €2.2b at end of FY22.