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TECHNOLOGY: TMT: Week In Review

TECHNOLOGY
BulletCredit Bullets
  • The Comms/Tech indices were -0.1bp/+0.2bp vs. the €IG Corps index this week for YTD performance of -3.5bp/+3.5bp vs. €IG Corps.
  • No IG supply this week; VodafoneZiggo priced a EUR 575mn B3/B-/B- 8NC3 Green that tightened just 12.5bps to price at 6.125%.
  • Rating action came in the form of Moody’s placing Vivendi on negative rating watch after earlier signing their EUR 2bn bridge deal to fund the group breakup. However, the breakup will see VIVFP bonds put at par and with all lines now trading back above 98pts (and the EUR 28s +2.6pts WoW) we don’t see this as a credit negative development.
  • In terms of news this week we saw the Cellnex CEO indicate that dividends would resume earlier than planned, DoJ expand its investigation into SAP, Telecom Italia receive a new, lower bid for its Sparkle unit, AT&T announcing the sale of its DIRECTV stake, Verizon announce the sale of tower assets and Vodafone/Three propose remedies to the CMA. See weekly PDF for links.
  • On spreads we saw US telcos perform well on the above-mentioned developments with TMUS joining the rally. More vulnerable names WLNFP, RCFFP and WBD were broadly flat.
  • WMG continues to grind wider with their 31s having underperformed by ~30bps since mid-Sept. The move aligns to announced changes to their restructuring plan that raised cost savings and charges slightly on additional headcount reduction though the changes looked marginal, and the equity has performed well since then.

 

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  • The Comms/Tech indices were -0.1bp/+0.2bp vs. the €IG Corps index this week for YTD performance of -3.5bp/+3.5bp vs. €IG Corps.
  • No IG supply this week; VodafoneZiggo priced a EUR 575mn B3/B-/B- 8NC3 Green that tightened just 12.5bps to price at 6.125%.
  • Rating action came in the form of Moody’s placing Vivendi on negative rating watch after earlier signing their EUR 2bn bridge deal to fund the group breakup. However, the breakup will see VIVFP bonds put at par and with all lines now trading back above 98pts (and the EUR 28s +2.6pts WoW) we don’t see this as a credit negative development.
  • In terms of news this week we saw the Cellnex CEO indicate that dividends would resume earlier than planned, DoJ expand its investigation into SAP, Telecom Italia receive a new, lower bid for its Sparkle unit, AT&T announcing the sale of its DIRECTV stake, Verizon announce the sale of tower assets and Vodafone/Three propose remedies to the CMA. See weekly PDF for links.
  • On spreads we saw US telcos perform well on the above-mentioned developments with TMUS joining the rally. More vulnerable names WLNFP, RCFFP and WBD were broadly flat.
  • WMG continues to grind wider with their 31s having underperformed by ~30bps since mid-Sept. The move aligns to announced changes to their restructuring plan that raised cost savings and charges slightly on additional headcount reduction though the changes looked marginal, and the equity has performed well since then.