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Walgreens Boots (WBA; Ba2 Stable, BBB- Neg)

CONSUMER STAPLES
  • Bloomberg is reporting the co has begun early stage discussions with potential bidders on the Boots chain sale in the UK (~est. £7b) - stock is bid on the reports.
  • Rumours on Boots sale is not new phenomena and has seen nothing eventuate in the past - US retail pharmacy makes up ~85% of the mammoth $145b in WBA sales. It could have a impact on BS with co struggling on liquidity & debt load (consensus sees only $1.2b in FCF this year).
  • It has asset sale covenants - seems well protected/we don't see par call but happy to hear thoughts to contrary/brief look from us.
  • The £300m 25 trade at £96.5/Z+138 and is behind ~$2.2b in dollar debt. €26s at €95/Z+114 is behind that alongside heavy maturities in '26.

Our take from 2Q Earnings (ending Feb); https://marketnews.com/walgreens-boots-wba-ba2-sta...

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