EU COMMUNICATIONS: SES Outlook Cut To Negative At Moody’s
SESGFP Baa3[N]/NR/BBB
Outlook cut at the close on higher competition, innovation risks, and leverage concerns post-Intelsat.
- Similar language to Eutelsat’s recent downgrade on excess capacity from LEO broadband services being redistributed to SES verticals e.g. maritime, aviation, gov’t.
- Some protection noted on specific/regulated requirements in these verticals while SES’ position in multi-orbit offerings helps differentiate their offering.
- PF leverage seen at 3.5x in 2024, increasing toward 3.8x in 2026 before returning towards 3x by 2027 on synergies and earnings growth. Potential acceleration on C-band proceeds.
- Liquidity described as good; 2025 FCF seen marginally negative before strengthening in 2026.
- Downgrade if competition drives further pricing pressure, gross lev remains >3.25x (prev: >3.75x) and neg FCF is sustained, or gov’t reduces stake.
- SES response says FY results on 26 Feb better-than-expected w/ revs at top end of EUR 1.94-2bn range and EBITDA above the EUR 950-1000mn range (cons is EUR 2bn and EUR 1bn). Affirmed IG commitment.
Want to read more?
Find more articles and bullets on these widgets:
Historical bullets
EUROZONE ISSUANCE: EGB Supply - W/C 20 Jan: Auctions (2/2)
- On Thursday, France will hold an MT OATs auction to sell a combined E11.0-13.0bln of the 2.50% Sep-27 OAT (ISIN: FR001400NBC6), the 5.50% Apr-29 OAT (ISIN: FR0000571218) and the 2.75% Feb-30 OAT (ISIN: FR001400PM68).
- Later on Thursday, France will also hold an I/L OATs auction to sell a combined E1.5-2.25bln of the 0.60% Jul-34 OATei (ISIN: FR001400JI88), the 1.80% Jul-40 OATei (ISIN: FR0010447367), the 0.10% Jul-53 OATei (ISIN: FR0014008181) and the 0.55% Mar-39 OATi (ISIN: FR001400IKW5).
NOMINAL FLOWS: The upcoming week sees no redemptions. Coupon payments for the week total E0.3bln of which E0.1bln are Slovakian and E0.1bln Greek. This leaves estimated net flows for the week at positive E50.2bln, vs positive E25.4bln last week.
EUROZONE ISSUANCE: EGB Supply - W/C 20 Jan: Auctions (1/2)
Slovakia, Germany and France are all due to hold auctions in the upcoming week while the EFSF is expected to hold a syndication. We pencil in further syndications from Austria, Finland and Spain. We look for estimated gross issuance for the week at E50.5bln, up from E40.9bln last week.
- Today, Slovakia will hold a 3/8/9/20-year SlovGB auction. On offer will be the 3.00% Feb-28 SlovGB (ISIN: SK4000024683), the 3.625% Jun-33 SlovGB (ISIN: SK4000023230), the 3.75% Mar-34 SlovGB (ISIN: SK4000024865) and the 4.00% Feb-43 SlovGB (ISIN: SK4000022547).
- Note that this will be the first reopening of the 4.00% Feb-43 SlovGB since its syndicated launch in February 2023.
- Tomorrow, Germany will hold a Green auction to sell E1bln of the 2.10% Apr-29 Green Bobl (ISIN: DE000BU35025) and E1bln of the 2.30% Feb-33 Green Bund (ISIN: DE000BU3Z005).
- On Wednesday, Germany will hold a 15-year Bund auction, looking to sell E1.5bln of the 2.60% May-41 Bund (ISIN: DE000BU2F009) alongside E500mln of the 2.50% Jul-44 Bund (ISIN: DE0001135481).
ECB: Holzmann Maintains Hawkish Bias, Says Jan Meeting Outcome Unclear
ECB GC member Holzmann maintains his hawkish bias in an interview with POLITICO.
- He points to energy price risks and the move lower in the EUR (although the latter is a "mixed blessing" in his eyes) as threats to the inflation outlook, meaning that the outcome of the January ECB decision is not a foregone conclusion in his eyes.
- He said the same last week.
- Bund futures unmoved since his comments, EUR/USD a handful of pips higher, back above 1.0300 (highs of 1.0308), but still shy of Friday’s high at 1.0330.
- ECB-dated OIS showed ~90% odds of a 25bp cut later this month as of Friday’s close.
- Holzmann’s view shouldn’t move that pricing too much/at all, given his hawkish history, broader support for further ECB rate cuts within the GC and the fact that he already said as much last week.
