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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.
CONSUMER CYCLICALS
28s are +1pt/-25bps, 30s are coming down given trading above par and with no coupon step-ups. Couple of points;
- The article references a +30% takeover premium as standard - based on that equities only pricing ~1/3 prob. here.
- Rumoured PE players in the article are Bain, CVC & Advent.
- 1H earnings are on Thursday.
- Current mgmt targets BBB ratings and has been there since 2014 (from S&P).
- It took away coupon-step ups starting on the newest '22 3-tranche deal - which was funding to acquire US competitor Terminix for $6.7b ($1.34b cash, rest in shares). It has deleveraged since; net 2.8x to end last year (FY22; 4.6x, FY21 1.9x) and S&P was happy to stay on BBB Stable throughout.
- Equities rose circa +13% last month when it was announced activist Peltz took a "top 10 stake" in the co - see here.
- Potential there was him ushering in new mgmt or splitting the business up. We haven't seen or heard much since but that was always going to be a slow burner (as are all his projects). Equities faded 5% of those gains the next session but have remained ~8% above pre-Peltz levels. We reference this to show equity px sensitivity to headlines.
Times headlines from earlier here.
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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