EU UTILITIES: RWE (RWE Baa2/NR/BBB+), Amprion (Baa1/NR/BBB+): Stake Sale
Dec-05 14:52
Likely credit neutral for both. We don’t expect meaningful deleveraging from RWE.
- Bloomberg reported that RWE is looking to sell its 25% stake in Amprion. Likely buyers would be infrastructure funds and likely credit neutral.
- Like TenneT, Amprion will have sizeable investment needs for the energy transition and needs backers who are in a strong position to provide equity.
- The report mentioned a possible €2bn valuation which is around 0.4x turns of EBITDA. The company recently announced a new share buyback program of €1.5bn over 18 months, partly due to a slower pace of planned investments.
- Current leverage is 2x, well below the policy ceiling of 3x.
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CANADA: Politics Week: Trudeau Facing Liberal Dissenters, Bloc Seeks Election
Nov-05 14:50
- This week is expected to bring a third straight Liberal caucus meeting where some question Justin Trudeau's leadership. Cabinet ministers have stepped up calls to remain united going into next election.
- Bloc Quebecois says it's inclined to vote non-confidence alongside Conservatives after government misses deadline for legislation on seniors' benefits and "supply management" farmer protections.
- NDP's Jagmeet Singh says “I’m not going to play their games” in a non-confidence vote. At the same time: “I don’t want a Liberal government, I don’t want Justin Trudeau as prime minister. There will be an election, and when that election comes people will have an important choice.”
- Polling aggregator 338Canada shows Conservatives likely to win a majority government if an election were held now. Election is due in the fall of 2025.
- Sample headlines: Justin Trudeau is spoiling for a fight, even if it means taking his party down with him (Globe and Mail); Canada had an immigration system we were proud of. Then Trudeau came along (National Post)
- Awaiting fall fiscal update after budget office said the government's deficit cap is being breached.
CANADA: USDCAD Extends Pull Back From Monday's Cycle Highs
Nov-05 14:45
- USDCAD has seen another step lower, dropping 30 pips amidst broader USD weakness.
- The larger than expected Canadian trade deficit has done little to stop the move with wider risk positioning likely at play ahead of the US election in a continued pullback from what had been particularly elevated levels.
- A stronger Canadian service PMI including highest cost inflation in a year also helps maintain the decline.
- USDCAD at 1.3852 touches lows since Oct 25, prior to a lift from a beat for US durable goods orders and a miss for Canadian retail sales.
- It has pushed through yesterday’s 1.3875 with support seen at 1.3822 (20-day EMA), for what’s been a sizeable pullback from 1.3959 (Nov 1 high) after a piercing of a key resistance to open medium-term resistance at 1.3977 (Oct 13, 2022 high).
MNI: US OCT FINAL SRVCS PMI 55.0 (FLASH 55.3); SEP 55.2
Nov-05 14:45
- MNI: US OCT FINAL SRVCS PMI 55.0 (FLASH 55.3); SEP 55.2
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