FREELAND: CANADA WON'T ESCALATE OR BACK DOWN ON US TRADE FIGHT

MNI: PBOC To Aim To Drive Inflation Higher- Advisors

MNI: China To Issue More Bonds As Stimulus Targets Consumption

MNI: PBOC To Aim To Drive Inflation Higher- Advisors

MNI: China To Issue More Bonds As Stimulus Targets Consumption

MNI BRIEF: China Nov M1 Decline Narrows, M2 Slows

EZ/UK T-Bill Calendar: 8/13/28/50-Week BTF Auction on Monday

EZ/UK Bond Supply Calendar: 4.125% Jul-29 Gilt Due on Tuesday

MNI: CANADA OCT WHOLESALE SALES +3.3%; EX-AUTOS +0.5%

MNI EXCLUSIVE: EU-Mercosur Deal Close, But Likely Short-Lived - Officials

AUSTRALIA: 2025 Election Outcome Looking More Uncertain According To Newspoll

© 1982-2024 MNI. All rights reserved.
Terms | Privacy
Log Out
Free Trial

More on Fallen Angel Elo/Auchan (NR, BB+ Stable)

CONSUMER STAPLES
  • Downgrade from S&P has little near-term positives, flagging the rising leverage on Casino super/hyper-market store acquisitions (France) that will increase lease debt (S&P est's €600-700m this year) and payments but not be EBITDA positive till estimated '25-26.
  • Its double negative when accounting for focus on French retail weakness - above acquisitions increases Elo's France market share which already makes up ~1/2 of revenues. Downgrade triggers include French retail EBITDA turning negative.
  • It does recognise the dividend cut for this year and €300m contribution from shareholders - but ultimately saw neither as enough.
  • Asset sales alone to bring leverage down will not be enough to restore IG ratings - it'll need to improve headline growth including margins/CF generation in French retail.
  • S&P was positive on NIH (the RE division/~30% of EBITDA) performance & contribution to ratings (stability of rental income/asset backed etc).
  • It reports 1H results generally around late July/early August.

    Curves likely to continue pricing a discount for the private equity issuer (reports are discount for private issuers has widened this year) & for the single (S&P) rating risk. We are sparse for comp's (including in Retail REIT's) but its settled +14-26bps wider for now - 26's still tighter than (struggling) IG rated VFC.

Credit BulletsBulletHomepagemarkets-real-timeCredit
Credit BulletsBulletHomepagemarkets-real-timeCredit

To read the full story

Close

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.