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.
We don't see any news...which leaves us seeing it as carryover sentiment from last week - that either peers (like UPS) or current owner Daniel Křetínský will bid for the co.
Credit has taken Rentokil's unconfirmed headlines of a PE buyer to bid the 28s in +1.8pts/-47bps while dumping the unprotected 30s -1.4pts/+27bps. Yet the equity moves (proxy pricing) are nearly the same; PostNL +12% since UPS regional CEO gave an open-ended answer to acquisitions last week and Rentokil similar this morning.
Both have earnings coming up (Rentokil on Thursday, PostNL in 2 weeks) and makes trading the par call possibility (CoC on all lines for both issuers) tougher. PostNL31s has added uncertainty of either a composite rating uplift (main competitors are higher rated issuers) or only ~small protection in the case of a PE bid.
In either outcome the PostNL26s benefit and it continues to screen value to us as a event trade. Carry at Z+70/B+105 to wait in there is wide of even equal rated peers...
We understand the bid for Rentokil too - equities on back-of-the-hand seem to be pricing ~1/3 chance of PE bid while we see the 28s pricing a 20% chance at €90.8/Z+5/B+40.
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.