EM CEEMEA CREDIT: Latvenergo AS: Min. €300mn 5Y

(LATVEN: Baa2/NR/NR)

IPT: MS+170A

FV:MS+130bp

• Latvenegro, one of the largest power suppliers and energy generators in the Baltics with operations in Latvia, Lithuania and Estonia is issuing a €300mn 5Y bond. The group has a 22% share in electricity generation across all Baltic states. Latvenergo is 100% owned by the Rep. of Latvia (A3/A/A-). Moody’s gives a 2-notch uplift citing strong probability of support. We use a number of comps for out FV assessment but anchor our FV around LINE30 bonds. 

   

• Ignitis Grupe (LIEENE: NR/BBB+/NR) 2% MAY30 is yielding around 3.58% yield or z+125bp
• ROMGAZ (NR/NR/BBB-neg) 4.625% NOV31 was issued last week and is currently yielding 4.65% or z+222bp.
• Energetica Electrica (ELRO: NR/NR/BBB-) 4.375% JUL30 is yielding around 3.98% or z+164bp
• MVM Energetika (MVMHU: BBB2neg/BBB-neg/BBB) USD 6.5% MAR31 in XCCY is around 3.86% yield or z+149bp.
• CZGRID (NR/BBB+/A-) 0.875% MAR31 is yielding around 3.29% or z+90bp.

• Adjusting for maturity and ratings we estimate a FV on the new €5Y bond at MS+130bp