January 07, 2025 10:11 GMT
CONSUMER STAPLES: Nestle: 7/20y FV
CONSUMER STAPLES
(NESNVX; Aa3/AA- Stable)
The world's largest F&B will kick off consumer supply. It is a open-to-retail curve on 1k denominations - todays issuance will be the same. Bonds in secondary made the bottom 10 for total returns last year as they came out of dislocated levels - and with low carry.
exp. €1b;
- exp. €500m 7Y FV +62 vs. IPT +90a (-28)
- €500m 20Y FV +110 vs. IPT +150a (-40)
- secondary is largely unch with only the long-end/low cash px lines moving (+3) - they have already been ignored
- YTD earnings are running at +2%, +1.6% of that in pricing. Net of a 4% FX headwind revenue is down -2.4%. FY guidance is for organic growth to remain at +2% and adj. trading operating margin at 17% (-30bps yoy). It started the year guiding to +4% and margin expansion.
- Net debt is increasing (CHF 59.5b at June up by 4b) as it continues equity pay-outs. Moody's said it was looking for EBITDA of CHF21b by FY25 (vs. 19.5b in FY23) but consensus has cut its estimate rapidly to 18.5b. Stock was -25% last year.
- UoP left broad, CHF3.8b due this year, skewed to $s and starting in July.
- Reminder co has a 20% stake in L'Oréal, valued at ~€36b on current market prices.
Last issuance (€1.15b 2-part);
- 6Y +40 (+11 since vs. €IG +7)
- 12Y +70 (+19 since vs. €IG +7)
20y swap is at 2.45% vs. 2.1% lows in early Dec - but move higher has been across the curve - 5s20s still flat at +10bps. New 20y lines;
- Coca-Cola KO (A1/A+) trades at +117 (+24 since pricing)
- Diageo (A3/A-) trades at +140 (+10 since pricing)
- AB Inbev (A3/A-); +145 (+12)
- Booking.com (A3/A-); +156 (-14)
- Above was 20.25y. The 20Y from March trades at +155 (+20)
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