EU CONSUMER STAPLES: JAB Group; S&P moves to watch negative (x2)
(JABHOL; Baa1 Stable, BBB+ Watch Neg)
JAB levels have always been 'interesting' for carry and somewhat remain that way (ignoring short-end).
The beta from the co does come from its investments performance but also how it manages loan-to-value/LTV ratio - its history in keeping it within the 15-20% target (outside temporary spike during Covid) is a positive.
- We see it facing -$2.5b in mark-to-market losses since it last reported in June (on the ~half it holds in public names). Bulk of that from a -$1.7b swing in Coty (-44%).
- We see that taking LTV from 24% to 26%. 8% sell-down of the portfolio could bring it <20%.
Re. the flag change to US, despite its German origins and headquarters in Luxembourg, its investment exposure is heavily US. Outside the 4 public co's (Coty, JDE Peets, Krispy Kreme, Keuring Dr Pepper), its largest private holdings are in NVA group (Veterinary clinics in the US) and Panera Bread (US and Canada restaurant chain). Recently acquired life insurer was in the US.
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PIPELINE: Corporate Issuance Update: $3B KFW +5Y Priced
- Date $MM Issuer (Priced *, Launch #)
- 01/14 $3B *KFW +5Y +40
- 01/14 $2.5B #BNG Bank 5Y SOFR+47
- 01/14 $2.5B *CADES 5Y SOFR+68, upsized from $2B
- 01/14 $2B IFC 3Y SOFR+29
- 01/14 $2B CAF 5Y SOFR+82
- 01/14 $500M #Hyundai 3Y +80
- 01/14 $Benchmark Blackstone Private Cr Fund 7Y +190a
- 01/14 $Benchmark LifePoint Health 7NC3
- 01/14 $Benchmark Adobe 3Y +50a, 5Y +60a, 10Y +80a
- 01/14 $Benchmark British Colombia 3Y SOFR+45
- 01/14 $Benchmark BFCM 5Y +120a, 5Y SOFR
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US Secretary of State Antony Blinken, speaking at an event hosted by the Atlantic Council, has confirmed that a Gaza ceasefire-for-hostage deal is "ready to be concluded and implemented" if Hamas accepts the conditions of the framework.
- Blinken says: "We believe the Palestinian Authority should invite international partners to help establish and run an interim administration in Gaza after a ceasefire deal," adding that an "interim security mission would be made up of forces from partner nations and vetted Palestinian personnel."
- Blinken notes that the Biden administration, "will hand off plan for post-war Gaza to the Trump administration to carry forward."
- Blinken's remarks are consistent with recent comments from US officials and Qatari mediators suggesting a ceasefire deal is closer than it has been in months, however, a final deal appears to hinge on Hamas approval, which in turn depends on how credible Hamas leadership deems a proposed Israeli military withdrawal from Gaza. As noted in earlier bullets (ISRAEL: WSJ-Israel, Hamas Finalising Gaza Deal, Could Come This Afternoon) there is some domestic uncertainty on the Israeli side, "in the form of the requirement for any deal to be approved by Israel's security cabinet and the full gov't."
- The Jerusalem Post reported a short time ago: "No final answer was given from Hamas regarding a hostage deal, an Israeli official [said]."
- A Qatari statement earlier today read: "We have overcome the major differences. This is the closest point we have been to a deal over the past months,"
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