EM LATAM CREDIT: Grupo Televisa: 3Q Earnings – Neutral
(TELVIS; Ba1neg/BBBneg/BBB-neg)
• The Mexican media conglomerate Televisa made some progress on debt reduction, but operating results were relatively flat, and the weak Sky video segment continued with heavy subscriber losses. The Fitch rating is tenuous, and spreads have reflected that concern.
• TELVIS 45s were last quoted T+364bp, 62bp wider since June 30th and 86bp wider YTD. TELVIS Bonds are trading wider than those of embattled Orbia (ORBIA; Ba1neg/BBB-neg/BBB), a Mexican chemicals producer also with tenuous IG ratings that recently got downgraded by Moody’s to Ba1 with a negative outlook, at a spread differential of 45bp. TELVIS 32s were quoted 63bp wider than 2031 bonds of Mexican auto parts company Nemak (TNEMAK; Ba2/BB+neg/BBB-*-)
• In a trend that has persisted for a few years now, 3Q 2025 Sky revenues fell 18% YoY driven by a loss of 300,000 video subscribers. Interestingly, the company also lost 42,691 cable video subscribers in 3Q.
• Televisa operating income fell .7% and revenue dropped 4.8% YoY. The company had a big decrease in net income but that was due to a non-cash tax-related issue.
• The company did manage to reduce debt, which has also been a positive persisting trend this year, but still gross debt leverage of over 4x remains too high for investment grade ratings from the perspective of Moody’s and Fitch so with operating results not making sufficient progress that leaves ratings vulnerable.
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GILTS: Gap Support In Futures Holds, BoE Governor Points To Further Cuts Again
Gilts find supports after bears manage to close the opening gap higher
- A bid in crude oil (albeit with that move linked to geopolitical risk), coupled with headlines promoting EGB spread widening and a sizeable US$IG deal, have provided the major headwinds for bonds over the past couple of hours.
- Recent comments from BoE Governor, as he continued to lean into the idea of further rate cuts, may have provided some modest background support.
- Futures last 91.03 vs. session lows of 90.96.
- Bulls now look to the September 11 high (91.82), while initial support of note is seen at the Sep 2/22 lows (90.65/60).
- Yields little changed to 1bp higher, curve marginally steeper.
- SONIA futures flat to +1.5, off highs given the move in bonds.
- BoE-dated OIS still pricing ~6bp of cuts through year-end and the next cut is fully discounted come the end of the April meeting.
UN: Presidents Of Ukraine, Iran & Argentina Among 2nd Day Speakers
The second day of the UN General Assembly general debate is underway (livestream here), with King Felipe VI of Spain delivering the opening address. Speakers on the second day include (with rough timings), Ukrainian President Volodymyr Zelenskyy (09:30ET/14:30BST), Iranian President Masoud Pezeshkian (10:00ET/15:00BST), Argentinan President Javier Milei (12:00ET/17:00BST), Finnish President Alexander Stubb (13:15ET/18:15BST), and Slovak President Peter Pellegrini (17:00ET/22:00BST).
- Zelenskyy's speech comes in the aftermath of US President Donald Trump's high-profile Truth Social post seemingly backing Ukraine's efforts to repel Russia's invasion to a greater extent than previously (albeit with implications Ukraine and Europe may have to go it alone, see 'UKRAINE: Trump Post Strikes Positive Tone, But Could Put NATO & Kyiv On Notice', 10:14BST).
- Pezeshkian will speak following a meeting of the E3 (France, Germany, UK), EU, and Iranian Foreign Minister Abbas Araghchi on 23 Sep in a last-minute effort to avoid snapback sanctions coming in on 27 Sep.
- Financial markets will be watching Milei's address with the US talking up its commitments to supporting the Argentine economy, which faces significant headwinds amid concerns that the opposition left-wing Peronists will retain control of Congress in the October legislative elections, stymying the Milei administration's reform efforts.
US TSYS: Early SOFR/Treasury Option Roundup: Mixed Midweek Trade
Mixed SOFR/Treasury options on generally light volumes (including overnight) ahead a quiet data & Fed speaker session, focus is on Thursday's heavy data drop: Personal Consumption, GDP, Durables/Cap Goods, and weekly claims. Underlying futures extending modest session lows after trading higher overnight, curves steeper (2s10s +3.344 at 55.142), projected rate cut pricing drifts near late Tuesday levels (*): Oct'25 at -23.2bp (-22.7bp), Dec'25 at -44.0bp (-43.3bp), Jan'26 at -55bp (-54.5bp), Mar'26 at -66.5bp (-66.5bp).
- SOFR Options:
- +3,000 SFRZ5 96.37/96.50/96.62 call flys, 2.75
- -10,000 SFRZ5 96.68/96.75 call spds, cab
- +5,000 0QX5 95.87 puts, cab ref 96.965
- +4,000 SFRF6 96.62/96.75 call spds 1.75 over 96.12/96.25 put spds
- +5,000 SFRH6 97.25 calls, 3 ref 96.535
- 2,250 SFRH6 96.12/96.18 put spds vs 96.62/96.75 call spds
- 8,750 0QZ5 96.68/96.87 2x1 put spds ref 96.975
- 6,000 0QX5 96.87/97.12 strangles ref 96.98
- 3,000 SFRZ5 96.62 puts ref 96.975
- Treasury Options:
- 1,250 TYV5 112.25/112.5/112.75 put trees, 5 ref 112-24
- over 15,000 TYZ5 114 calls, 31 last (another 116k traded Tue, OI +64.9k to 229.3k)
- 2,500 TYV5 112.5 puts, 3 total volume over 6.6k)
- 2,000 TYV5 113/TYX5 111.5 put spds ref 112-28
- over 7,200 wk1 TY 112.25 puts, ref 112-28 (exp 10/3)
- 3,000 TYZ5 113.5/114 call spds ref 112-29
- 2,000 TYX5 114/TYZ5 114.5 call spds ref 112-30
