Tapestry (TPR; Baa2, BBB+; double Neg) {TPR US Equity} {CPRI US Equity}

• Cash bonds have struggled on today's headlines (€27/31's +10 wider, $33's +25bps) while Capri equities are trading through it.
• As we mentioned, reports US FTC is considering a block are not new (first emerged late on Friday) - credit has been playing catch up all week (€ lines were +12-20 wider on Monday) after trading rich vs. equities.
• On FTC; Biden has lead a political skew on antitrust enforcement & has had support from the chair of the 5-member FTC commission & a anti-trust crusader, Lina Khan. She is the only one who's term is due to end this year (in September). Our political risk team note timing close to Nov election leaves replacement messy - Chair is nominated by president but this may be post-election.
• Outside of new Chair uncertainty we'd note bids from FTC under Lina have had mixed success in recent past - a Judge ruled against FTC on Meta acquisition of Within Unlimited & (different Judge) against it on Microsoft acquisition of Activision Blizzard. William Kovacic, a former F.T.C. chair, was on NYT adding the Tapestry deal was "not a case that has great appeal as a way of protecting the downtrodden" in reference to cases FTC/regulators take on to establish precedent.

We continue to not take a view on if the deal will close (we've seen view agnostic opportunities in credit/equities). € lines screen fair to cheap here - total return breakeven has come into early July on €101 call.

Strong screen cheap views on both 27 & 31s on any headlines of US FTC approval - we see 50-60bps of tightening on 27s & over 100bps on the 31s.