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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.
CREDIT SUPPLY
Rating: Baa2/BBB/BBB[P]
- IPT given at MS+115a; we see FV around MS+72.5-75bps which makes IPT look decently wide.
- Vodafone last came to the senior EUR market in Feb 2023 in a EUR 500mn 20y deal that tightened 40bp to price at MS+135bps with a cover of 5x.
- Spreads have performed well against peers in July; main news flow over the period has centred around the offer of remedies in the form of spectrum sales to Virgin Media (which we saw as an expected incremental positive for sentiment around the Three merger) and the sale of stakes in Vantage Towers with the proceeds to be used for deleveraging.
- Previously we weren’t a big fan of the credit though admit that sentiment around the name has been shifting. Management have been swift and persistent in the execution of their strategic refocusing and leverage looks set to move lower again as a result (FY24 saw leverage fall to 2.5x from 2.7x against the new target of the bottom half of the 2.25-2.75x range). Upside rating pressure seems possible given these changes with Fitch already on Positive outlook; the short-end already looks tight against the BBB+ Communications curve though the long-end looks to have room to rally. That said, problems persist in largest market Germany with last week’s results showing a return to negative organic growth and poor KPI’s on the back of price hikes and regulatory changes while the strategic refocusing serves to dampen Vodafone’s best-in-class market diversification.
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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