TECHNOLOGY: Nexi Curve Steady In Wake Of Rating Upgrade
NEXIIM Ba1/BB+[P]/BBB-
Limited reaction to Nexi’s IG rating from Fitch; the name trades tight for its rating and versus peers - we note that there has been takeover interest in the past (most recently by CVC who were reportedly studying a deal in October 2023) so we also look at the language around a CoC and ratings events.
- Fitch forecasts mid-single-digit revenue growth, EBITDA margin rising to 52% by 2026, EUR 1.3bn capex (2024–26), and EUR 1.25bn debt repayments (2024–25). Bolt-on M&A of EUR 400mn (2025) and EUR 200mn annually (2026–27) funded by FCF. Share buybacks at EUR 500mn (2024), with net leverage under 2.5x by 2025 (against thresholds of sustained below 3.2x and remaining above 6.5x).
- CoC triggers put at 101 on a sale of substantially all assets or an acquisition of >50% of voting rights followed by a ratings event within 90 days (extendable to 180 if any agency announces a review for downgrade).
- If Nexi has two or more IG ratings, a ratings event is defined as any downgrade that results in the name losing IG status from at least two agencies. If Nexi is not IG with at least two agencies, then a ratings event is defined as any downgrade.
- Hence, this upgrade (nor the one likely coming from S&P) does not raise the bar for triggering a CoC. A subsequent upgrade from Moody’s (or a second upgrade from S&P/Fitch) would have a greater impact here though a PE buyout from CVC or others would likely result in a trigger regardless.
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LOOK AHEAD: Tuesday Data Calendar: Build Permits, House Starts, State Payrolls
- US Data/Speaker Calendar (prior, estimate)
- Nov-19 0830 Building Permits (1.425M rev, 1.435M); MoM (-3.1% rev, 0.7%)
- Nov-19 0830 Housing Starts (1.354M, 1.334M); MoM (-0.5%, -1.5%)
- Nov-19 1000 State-level payrolls and unemployment data for Oct
- Nov-19 1130 US Tsy $80B 42D CMB auction
- Nov-19 1310 KC Fed Schmid economic outlook (text TBA, Q&A)
BOE: Tiering is not needed for BOE's "objectives"
Governor Bailey being asked about tiering over the past few minutes. He's repeating comments he's made in the past:
"That is a decision for the government... We do not need to do this for our objectives, in fact it's contrary to our objectives." He has also said that it would be a tax on the banking system.
US 10YR FUTURE TECHS: (Z4) Trend Needle Points South
- RES 4: 112-22 High Oct 16 and a key short-term resistance
- RES 3: 111-17+ 50-day EMA
- RES 2: 111-14+ High Oct 25
- RES 1: 110-12 20-day EMA
- PRICE: 109-30+ @ 11:21 GMT Nov 19
- SUP 1: 108-18+ 1.236 proj of the Oct 1 - 10 - 16 price swing
- SUP 2: 108-03 1.382 proj of the Oct 1 - 10 - 16 price swing
- SUP 3: 108-00 Round number support
- SUP 4: 107-19 2.0% 10-dma envelope
The trend outlook in Treasuries is unchanged, it remains bearish and the latest recovery appears corrective. Moving average studies are in a bear-mode set-up, highlighting a clear downtrend and bearish market sentiment. Sights are on 108-18+ next, a Fibonacci projection. Further out, the focus is on the 108-00 handle. Initial firm resistance is unchanged at the 20-day EMA. The average is at 110-12.
