April 25, 2024 11:21 GMT
Werfen (WERFEN; NR, BBB- S, BBB- Pos) Private co, Guidance through FV
HEALTHCARE
€500m 6Y IPT was +175, Guidance is +150 (books>€1.9b) vs. our FV +155 - secondary including 28s screened wide (we were typing when guidance came out) so guidance coming through our FV looks like a repricing on the name.
FV's are always based on existing secondary & 28s at +120 do trade - it screens more attractive here than the new issue at ~150.
- Relevant diagnostic comp's like Danaher & Thermo Fisher are higher rated & others like Bio-Rad & Quest Diagnostics only issue in $ - we've added back in pharma Viatris for that reason.
- We expect pricing inside larger scale health tech/research services name Iqvia (Ba2, BB; S) - 28's have rarely moved outside it. We do expect pricing outside heavyweight pharma VTRS which we have no issue with (we have a screen cheap view on the VTRS27s).
- Separate to pricing, Werfen does trade wide for ratings. Granted this is a private co but so is equal rated Swedish medical device co Molnlycke that trades 30bps inside on the 28s - granted much larger in scale (x10) but is single rated & seems to have elevated vol on earnings.
- 28s may screen cheaper than new issue (front bond maturity). Fair warning Werfen 28s are still at relative tights to it - I.e. flows may not enable compression to FV.
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