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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.
COMMUNICATIONS
Rating: Baa3/BBB-/BBB-
- EUR 500mn no-grow 8y deal likely coming tomorrow. Management commitment to IG ratings seems strong; deal includes a 125bp step-up should S&P or Moody's drop to HY; reverses on resumption of IG. Proceeds to fund EUR 240mn tender of their EUR 600mn 2026 line.
- Revenue is roughly split between Studios and Media & Ent with M&E revenue mostly composed of Total Ad Revenue which is, like most advertising businesses, facing economic headwinds though a 3% rise in Q1 and 12% guidance for Q224 offers some hope. ITV Studios targets 5% CAGR from FY21-26 though FY24 is guided to be flat with GBP 80mn deferred due to US strikes – with strikes out of the way the outlook is positive for the rest of the target period though risks persist around content spending. Active cost saving measures speak to operational efforts and seem to be making good progress.
- BS is strong and seems to position ITV well within recent ratings; FY23 net debt of GBP 0.55bn; equiv. to 1x adj-EBITDA and 1.5x FCF with the recent news that the ITV pension is now in surplus removing a ~10% drag on FCF. Q1 net debt fell to GBP 272mn on the BritBox sale though the proceeds are earmarked for payouts. Note a gradual debt schedule; the tendered line comes in Sept 26 followed by a GBP230mn term loan due July 2027 while cash stood at just GBP 340mn at FY23 (Q1 higher on Britbox but to be distributed) and undrawn facilities of GBP 900mn.
- S&P affirmed in May; FY23 leverage of 1.2x seen at 1-1.5x in coming years against upside and downside thresholds of sustainably <1.5x and approaching 2.5x. FOCF to Debt seen at 25-30% in FY24, improving towards 40% by FY25 against a downside threshold of sustainably <20%.
- Fitch published in March; saw 2024 net leverage at 1.1x and <1x by 2026 against thresholds of consistently <1.3x and trending >1.8x. CFO-Capex to Debt seen consistent with the rating in 2024 before improving to >20% against thresholds of 20% and 12.5%.
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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