(ATDBCN: Baa1/BBB+)
(SVELEV; A2 CW Neg/A CW Neg)
Circling back to last weeks results (which were fine). The mover for credit will remain on the 7-11 bid - the theme of which remains unchanged; Couche persistent, 7-11 publicly open but seemingly moving at a snails pace as it (likely) focuses on appeasing equity holders using other internal methods. 7-11 equities price little confidence in a takeover but we still find ATD € credit levels uninteresting for the risk. For longer term investors already involved it may be value to look past this - ATD is a seasoned M&A operator. Worth noting founder and Chairman Alain Bouchard is 76yrs old - he stepped away from the CEO role since 2014 but has had a active role in the 7-11 bid. It has CAD700m due this year - all trade relatively similar on XCCY.
Few asides worth noting from mgmt remarks;
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The next Fed rate cut is again fully priced for the July meeting, following a 6bp futures-implied move today on the back of soft Services PMI data exacerbated in the afternoon by a risk-off move in equities.
Meeting | Current FF Implieds (%), LH | Cumulative Change From Current Rate (bp) | Incremental Chg (bp) | Prior Session (Feb 20) | Chg Since Then (bp) | End of Last Week (Feb 14) |
Mar 19 2025 | 4.32 | -1.5 | -1.5 | 4.32 | -0.9 | 4.32 |
May 07 2025 | 4.25 | -8.4 | -6.9 | 4.28 | -3.1 | 4.28 |
Jun 18 2025 | 4.14 | -19.4 | -11.0 | 4.18 | -4.2 | 4.18 |
Jul 30 2025 | 4.07 | -26.2 | -6.8 | 4.13 | -6.0 | 4.13 |
Sep 17 2025 | 3.97 | -35.7 | -9.5 | 4.04 | -6.5 | 4.04 |
Oct 29 2025 | 3.92 | -41.2 | -5.5 | 4.00 | -8.0 | 3.99 |
Dec 10 2025 | 3.86 | -47.3 | -6.1 | 3.95 | -8.8 | 3.93 |