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Kering (NR, A- Stable) {KER FP Equity} cash moves

CONSUMER CYCLICALS
  • Cash lines settling +6-11bps wider with a repeat high-beta sell-off (vs. equities) - similar moves on guidance warning last month which reversed ~half in weeks following.
  • We don't expect a repeat of that this time given no-turnaround in sight (mgmt refusing to give FY guidance) leaving only the rough 2Q/1H results in sight. Curve is priced for a downgrade here & limits near term sell-off's barring announcements of any acquisitions and/or comp lux retailers reporting major weakness (particularly in China) between then.
  • 31s (+10bps) screen cheapest on curve (at Z+80), 20bp pickup into Edenred still there.
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  • Cash lines settling +6-11bps wider with a repeat high-beta sell-off (vs. equities) - similar moves on guidance warning last month which reversed ~half in weeks following.
  • We don't expect a repeat of that this time given no-turnaround in sight (mgmt refusing to give FY guidance) leaving only the rough 2Q/1H results in sight. Curve is priced for a downgrade here & limits near term sell-off's barring announcements of any acquisitions and/or comp lux retailers reporting major weakness (particularly in China) between then.
  • 31s (+10bps) screen cheapest on curve (at Z+80), 20bp pickup into Edenred still there.