CONSUMER STAPLES: Tereos: 6NC2 FV, books close 2:30pm London
(Snr Unsec; NR/BB- Pos/BB Pos)
€300m 6.25-NC-2.25 FV 5.70% (eqv. OAS+300) vs. Price Talk at 5.875% (eqv. OAS+320)
- €101 CoC, only €30m in net supply
It's timing this issuance well - Sudzucker should take note. As it has mentioned sugar prices are normalising (Europe: {QWA Comdty}, US: {SB1 Comdty}) and will drag earnings with it (see Sudzucker for public co having issues). WC/FCF vol inherent with these co's will need to demand a discount (see historical volatility in secondary). Only comparable peer in size is Sudzucker (#1 in sugar doing €10b vs. Tereos €7b) noting Sudzucker is nearly entirely Europe+ UK exposed vs. Tereos 23% exposed to overseas (which seems focused in Brazil). Other names included below - but not comparable on scale or ratings - are Louis Dreyfus & Cargill - part of the 'ABCD' 4 who control global grain trade. Strong BS governance, including target <€2b in net debt, has seen raters move to positive outlook. Company is private but has good reporting clarity (quarterly).
No firm view from us.