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Week in Review; IFF {IFF US Equity} (Baa3, BBB-, BBB; Triple Neg); equities -8%

CONSUMER STAPLES

* On earnings; the €26's moved tighter post-earnings - counterintuitive to us given FCF guidance for FY24 missed by over $300m & there was little progress towards net leverage target (at 4.5* vs. 3*). Though it was offset by a (surprise) halving in dividend (+$400m/yr boost), FCF this yr won't help move the needle with net debt at $9.4b (cash & eqv's of $0.7b).

* Looking ahead; we see it needing to pay down $3-3.5b in debt to bring leverage in target - that leaves asset sales in driver seat and on that mgmt refused to confirm/deny reports on the pharma segment sale - the $200m EBITDA business is (reportedly) being earmarked at $2.5-3b.

* On pricing; there might be some complacency in local markets (& to some extent $ markets) around mids on the 26's - at Z+94 (YTM/W) we see little pricing of any downgrade risk. Raters yet to comment.

Not a name that screens cheap to us here, b/a is 10 wide.

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