EM CEEMEA CREDIT: Kosmos Energy: Term Loan details, neutral
(KOS; B3neg/CCC+neg/B-RWN)
"*KOSMOS ENERGY ENTERS SENIOR SECURED TERM LOAN UP TO $250M" -BBG
• Not a surprise, neutral read. In secondary, KOS Oct31s chart 1.25pt up in cash at 77.875 area or 14.36% yield.
• Announcement of details of the previously anticipated term facility at Ghana-focused, US-HQ E&P Co. Kosmos Energy’s Mexican wholly owned subsidiary, leaves USD250mn of fresh resources for refi of outstanding short dated ’26 notes. We had commented on this as part of Q2 earnings back in August. Link to earlier note: https://mni.marketnews.com/3HvBnKu
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EQUITY TECHS: E-MINI S&P: (U5) Trend Needle Points North
- RES 4: 6600.00 Round number resistance
- RES 3: 6572.45 2.0% 10-dma envelope
- RES 2: 6523.63 1.764 proj of the May 23 - Jun 11 - 23 price swing
- RES 1: 6508.75 High Aug 15 and all-time High
- PRICE: 6454.25 @ 14:35 BST Aug 26
- SUP 1: 6362.75 Low Aug 20
- SUP 2: 6313.25 Low Aug 6
- SUP 3: 6304.76 50-day EMA
- SUP 4: 6239.50 Low Aug 1
The dominant uptrend in S&P E-Minis remains intact and last Friday’s rally reinforces current conditions. Moving average studies are in a bull-mode position, highlighting a clear uptrend and positive market sentiment. Attention is on 6508.75, the Aug 15 high and the bull trigger. Clearance of this level would confirm a resumption of the uptrend and open 6523.63, a Fibonacci projection. Support to watch lies at 6304.76, the 50-day EMA.
US DATA: House Price Momentum Continues To Wane
House prices were mixed versus expectations in June, but the overall trend is toward further softening.
- The FHFA's house price index fell 0.2% M/M (-0.1% expected, -0.1% prior), with the S&P CoreLogic 20-City index falling 0.25% M/M (-0.20% expected, -0.32% prior).
- Momentum In all of the major house price aggregates is turning decidedly lower, amid rising inventories/low sales and continued high mortgage rates negatively impacting affordability.
- The FHFA's index is now falling at a 1.7% 3M/3M annualized rate, the weakest since 2011, with the S&P's 20-City at -2.7%, weakest since early 2023. This should be taken into broader context: both indices are up around 50% vs the start of 2020 and remain positive on a Y/Y basis (2.6% and 2.1% respectively) but have slowed considerably on that basis in the last several months.
- With pending home sales remaining weak and homebuilder sentiment as negative as it's ever been, we continue to expect downside pressure on prices.
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