BASIC INDUSTRIES
- Spreads performed in line, 2.5bp tighter on average for the week.
- SKF bonds continue to perform; the recent attempt at a consent solicitation looks to have emboldened holders arguing for an event of default.
- Deere results were even weaker than expected, but it managed to hold firm on FY guidance.
- DSM-Firmenich had a busy week, first announcing an asset sale followed by results that showed strong FCF. Buybacks were increased and it’s executing a major spinoff this year.
- The main point of note from Stora Enso results was that it will no longer provide EBIT guidance. Its comments suggest a soft outlook.
- Strong recent preliminary figures from Siemens Energy were confirmed, while FCF guidance is set to increase.
- TE Connectivity announced a meaningful acquisition, but which looks manageable from a credit perspective. Moody’s confirmed no ratings impact.
- Albemarle, Legrand and Siemens produced strong results. We viewed Carrier Global, Smurfit Westrock, Metso, Safran and Norsk Hydro results as largely neutral.
- Primary dynamics were strong once again. Linde issued a triple tranche, pricing 5-7bp through our FV. Air Products brought a dual tranche 2-4bp inside our FV.
Honeywell was put on watch negative by Fitch, hot on the heels of S&P. Amphenol was upgraded to A- by S&P. Celanese was unsurprisingly cut to HY by Moody’s, which will see it move into HY indices.
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