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Walgreens Boots (WBA; B1, BB Neg) Asset sales continue

CONSUMER STAPLES

It's selling 2% of its current 12% stake in Cencora {COR US Equity} for $1.1b. Proceeds primarily for debt paydown (as you would hope). It had a circa 15% stake late last year and has been slowly selling it down for debt reduction.


  • As rates have pointed out co has assets to help it raise cash and tackle the ~$6b due over next 2 years. The other one that has been rumoured (& signalled by co) VillageMD stake - more uncertain how much it will get for that one given it has had large impairments this year on poor performance.
  • Like Auchan it doesn't change the core issues in US retail pharmacy business but unlike Auchan it still has profit making retail divisions - Boots UK - who is contributing 25% to the bottom line YTD. Perhaps the most stark difference between Auchan and Walgreens is the former is buying loss-making stores, latter closing them down.
  • We flagged late last week we were starting To see value on €26s that were trading dislocated to ratings, $curve and CDS; it has moved +2pts this week. Yet to see it stream prices this morning, but no firm view here/looks fair.
  • Asides; S&P saw recovery rate at 50-70% or "meaningful" and you will have ~2+ months of carry to FY results in early October.

Presser here

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