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Fraport (FRAGR; unrated) T+1 Secondary

TRANSPORTATION
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Perhaps the golden child for unrated issuers; tightened 30 in from IPT, gave no NIC, upsized books, still had 2.5x cover & moved -12 in secondary.

  • 1k denoms might have helped bring in retail demand but the existing 28s & 27s are the same & our FV was based on their trading history. Its now spread +45bps to 28s for 4.2yr term extension - PVH, a IG retailer, gives the same for 1.5yrs.
  • Its hard to pinpoint where this would have been rated but a publicly traded equity (vs. most airports private), regular quarterly reports & ~50% government ownership might be doing some work to offset the NR discount.
  • Not a curve that shows any value to us; BS is gross 9.8x levered with guidance for net leverage at 6.4x to stay unch this year. Adding to that no positive FCF in sight on heavy capex for terminal development at Frankfurt & Lima (Capital of Peru).
  • 2Q earnings come early August.

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Perhaps the golden child for unrated issuers; tightened 30 in from IPT, gave no NIC, upsized books, still had 2.5x cover & moved -12 in secondary.

  • 1k denoms might have helped bring in retail demand but the existing 28s & 27s are the same & our FV was based on their trading history. Its now spread +45bps to 28s for 4.2yr term extension - PVH, a IG retailer, gives the same for 1.5yrs.
  • Its hard to pinpoint where this would have been rated but a publicly traded equity (vs. most airports private), regular quarterly reports & ~50% government ownership might be doing some work to offset the NR discount.
  • Not a curve that shows any value to us; BS is gross 9.8x levered with guidance for net leverage at 6.4x to stay unch this year. Adding to that no positive FCF in sight on heavy capex for terminal development at Frankfurt & Lima (Capital of Peru).
  • 2Q earnings come early August.