EM CEEMEA CREDIT: PKNPW: IPTs and FVs
Jan-23 09:26
Orlen (PKNPW; A3/-/BBB+)
New issue deal: USD 10Y benchmark
IPT @ T+185bp FV @ z+185bp (+10bp region) or T+140bp (+10bp region)
Our below note as posted out yesterday:
- PKNPW has mandated banks for deal related investor calls, suggesting a debut USD 10Y benchmark may follow. That would indicate a potential Jan35 maturity.
- Our analysis suggests FV @ z+185bp area, approximately 50bp premium vs sovereign POLAND 5.125 Sep34 (@ z+136bp). We extrapolate the proposed 10Y tenor by looking at seasoned EUR benchmarks, with x-ccy adjusted z-spreads for PKNPW 1.125 May28 @ z+116bp (z+95bp in EURs) and PKNPW 4.75 Jul30 @ z+141bp (z+122bp in EURs).
- When looking at the shape of the seasoned EUR PKNPW curve, we contrast it to the steeper EUR CZGRID (-/BBB+/BBB+WP) curve, a natural gas distribution network in neighbouring Czechia.
- We also refer to longer dated Polish, government-guaranteed USD BGOSK (A2/-/A-) 5.75 Jul34 charting @ z+168bp. Our FV comes @ +10bp pick up vs extrapolated BGOSK.
- Both POLAND and BGOSK secondary curves show some spread pick up for USD vs post x-ccy adjustment EUR bonds. Hence, we would consider adjusting the FV similarly.
- As a 49.9% government owned, integrated energy company, Orlen’s operational activities are segmented across four core pillars, Upstream & Supply, Downstream, Energy, Consumers & Products. Management is focused on delivering a group strategy 2035 aimed at asset decarbonization and energy transition (from coal to renewables), with a more diversified EBITDA composition away from upstream business. At 9M24, Netdebt/EBITDA stood @ 0.04x, with group revenues of PLN219.4bn and EBITDA @ PLN27.3bn. CAPEX was @ PLN20.8bn.
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CROSS ASSET: MONTH END EXTENSION (update)
Dec-24 08:21
This should be a non event for Year End, they are small, and only the lower liquidity could get Govies moving, but unlikely, as investors turn their attention to 2025.
Bloomberg Bonds:
- US Tsys: +0.07yr (small, average).
- EU Govies: +0.04yr (small).
- UK Govies: -0.02yr (non event).
MS Bonds:
- US Tsys: +0.05yr (small).
- EU Govies: +0.03yr (small).
- UK Govies: To contract (non event).
Barclays FX:
- Their Quarter rebalancing model only shows a Weak Dollar Buying signal.
GILTS: Opens within the Calls
Dec-24 08:09
- A slightly higher open for Gilt, was just down 2 ticks at 92.46 vs close, a small wide range of 16 ticks on the Open, but as expected very poor volumes as also seen in the Sonia Strip.
- In Terms of Technical, support is at 91.87, while resistance moves down to 92.92.
GILTS: Opening calls
Dec-24 07:57
Gilt Calls will be taken from Tnotes, with Europe closed, 92.40, would be 8 ticks down.
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