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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
Euro (darker shade) and sterling (lighter) IG consumer curves below with £ swapped to Euros (Z spread).
- We mentioned Walgreen £25s (Ba2/BBB- Neg) looked cheap vs. €26s and it screens that value on XCCY as well. Reminder reports are Boots IPO called off for now but ongoing discussion with PE firms.
- Regardless £25s only has $2b in debt ahead of it vs. ~$5b for the €26s (WBA has front-loaded maturity profile).
- Ex. hedging costs/in local currency the £25s yield 6.1% vs. 4.3% on €26. Should be for those with appetite for HY ratings/S&P lagging (our opinion). Also note comparison fair given 3-month par calls only (fallen angel).
- We also mentioned Mobico £28s (Baa3 Neg/NR/BBB- S) looking rich - again seems to hold on XCCY with a steep curve. Mobico is a tough co to like with business sale of the North American bus business to shore up liquidity still not complete and the pro-forma BS impact uncertain.
- The £28s gives 5.85% while €31s 5.7%. We are still on the side-lines with the €31s and those in £28s should consider rotations into B&M28s or 30s (Ba1/BB+) with no spread give up or the new Burberry 30s that we see pricing wide of it tomorrow (it won't be cheap to us at FV though).
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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