EU CAPITAL GOODS: AGCO (AGCO Baa2/BBB-[P]/NR): 4Q24 Results
AGCO expects another challenging year for the industry with demand still softening. It managed to reduce inventories over 2024. It sees 18% revenue declines this year: that’s at the low end of CNH’s agricultural outlook despite AGCO expecting to grow market share. This is not really an incrementally negative release with expectations already depressed.
- AGCO reported revenue 8% below consensus.
- Adj. EBIT beat by 4% thanks to margins 1.2ppts ahead at 9.9%. It also took an impairment charge. Management cited a focus on cost controls.
- FCF of $680mn missed expectations of $880mn; we expect analysts had more favourable WC assumptions. We see net leverage at 1.7x down from 2.4x sequentially and up from 0.6x YoY.
- FY25 revenue and EPS guidance were in line with consensus.
- Webcast replay https://edge.media-server.com/mmc/p/gr2cvktn/.
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EGB SYNDICATION: New 30-year SLOREP: Priced
*Now including spot ref for the benchmark
- Size set earlier: E1bln (MNI expected E1.0-1.5bln)
- Spread set earlier at MS+128bp (Guidance was MS+140bps area then MS+135bps area)
- Reoffer price 99.10 to yield 3.548%
- Books above E2.1bln (inc E410mln JLM interest)
- Maturity Date: 14 April 2055
- Coupon: 3.5%, annual, act/act, long first
- HR: 93% vs 2.50% Aug-54 Bund (95.995 / 2.697%)
- Settlement Date: 14 January 2025 (T+5)
- Joint Bookrunners: Deutsche Bank, Erste Group, Goldman Sachs Bank Europe SE, HSBC, J.P. Morgan (B&D) and OTP Banka Slovenia
- ISIN: SI0002104873
- TOE: 15:05 UKT / 16:05 CET
- FTT: 15:20 UKT / 16:20 CET
Details as per Bloomberg and Market Source
US: Spkr Johnson Confirms Intent To Raise Debt Limit In Reconciliation Package
House Speaker Mike Johnson (R-LA) has told reporters, during the first Republican leadership presser since the opening of the 119th Congress, that his “intention” is to raise the federal debt limit as part of the budget reconciliation process.
- Johnson says because the GOP controls all three branches of government, the Republican Party is “in better stead” to deal with the debt limit via party-line reconciliation rather than as part of regular Congressional appropriations.
- Johnson adds: “There is a broad range of opinion in our own conference and we’re working through that… We will be having very deliberate, lengthy whiteboard sessions with all of our members…”
- Johnson says: “I want to emphasise… Republicans in this majority in the House and the Senate, our intention, and our mission, is to reduce the size and scope of government, to reduce spending in a meaningful way… Raising the debt limit is a necessary step so we don’t give the appearance that we’re going to default in some way on the nation’s debt. That’s important to the bond markets, and stability of the dollar, and all the rest, but that does not mean we will tolerate spending up to the new debt limit. The intention is to do the complete opposite.”
- The Wall Street Journal noted this morning: "Republicans have the power to raise the debt ceiling by themselves, and they will try to do that in their tax, border, energy and spending-cuts legislation... That would be the first one-party debt-limit increase since 2010."
EGB SYNDICATION: New 30-year SLOREP: Priced
*Now including TOE/FTT/and HR
- Size set earlier: E1bln (MNI expected E1.0-1.5bln)
- Spread set earlier at MS+128bp (Guidance was MS+140bps area then MS+135bps area)
- Reoffer price 99.10 to yield 3.548%
- Books above E2.1bln (inc E410mln JLM interest)
- Maturity Date: 14 April 2055
- Coupon: 3.5%, annual, act/act, long first
- HR: 93% vs 2.50% Aug-54 Bund
- Settlement Date: 14 January 2025 (T+5)
- Joint Bookrunners: Deutsche Bank, Erste Group, Goldman Sachs Bank Europe SE, HSBC, J.P. Morgan (B&D) and OTP Banka Slovenia
- ISIN: SI0002104873
- TOE: 15:05 UKT / 16:05 CET
- FTT: 15:20 UKT / 16:20 CET
Details as per Bloomberg and Market Source
