EU CAPITAL GOODS: Siemens: Healthineers Spinoff (x2)
(SIEGR; Aa3/AA-/A+)
BBG citing insiders: " Siemens AG is leaning toward handing a large stake in its Siemens Healthineers AG unit to its own shareholders as a dividend in kind...The Munich-based firm would likely reduce its stake to below 40% with the move, which would allow it to deconsolidate the business, the people said."
See below from DG last week
No credit impact.
• Bloomberg reports that Siemens is exploring options for Siemens Healthineers, including a potential spinoff of a large part of the stake.
• Siemens currently owns 71% and a sell down below majority would see it deconsolidated.
• We estimate the loss of EBITDA from a full exit would push leverage ~0.7x higher at worst. That is an unlikely scenario as we expect Healthineers would raise debt to replace financing liablilities to Siemens. Healthineers targets leverage in line with a stable IG rating. We expect Siemens would protect ratings and had ~0.5x leverage headroom at last report.
• Other scenarios could include further outright sales which would reduce leverage.
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US TSY FUTURES: BLOCK: Dec'25 2Y Sale
- -6,364 TUZ5 104-07, post time bid at 1224:51ET, DV01 $250,000.
- The 2Y contract trades 104-07 last (-1.12)
US TSYS/SUPPLY: Preview 10Y Auction
Treasury futures are steady to mixed, off early session highs with the TYZ5 steady at 112-21.5 (10Y yield -.0421 at 4.0454%) ahead of the $39B 10Y Note auction re-open (91282CNT4) at the top of the hour, WI is currently 4.117%, 8.4bp cheap to last month's stop.
- September auction recap: Treasury futures gapped higher - extended highs (TYZ5 +7.5 at 113-18.5 vs. 113-20 high; 4.0321% yld) after the $39B 10Y note auction re-open (91282CNT4) stopped through: drawing 4.033% high yield vs. 4.047% WI; 2.65x bid-to-cover vs. 2.35x prior.
- Peripheral stats: indirect take-up surged to 83.13% vs. 64.23% prior; direct bidder take-up at 12.66% from 19.61% prior; primary dealer take-up fell to new low of 4.21% vs. 16.87% prior.
LOOK AHEAD: Thursday Data Calendar: Fed Speakers, 30Y Bond Re-Open
Thursday's weekly Jobless Claims and Wholesale Trade Sales/Inventories suspended due to the Gov shutdown.
- US Data/Speaker Calendar (prior, estimate)
- 10/09 0830 Fed Chair Powell welcome remarks
- 10/09 0835 Fed VC Bowman open remarks, moderated discussion
- 10/09 1130 US Tsy $110B 4W & $95B 8W bill auctions
- 10/09 1245 Fed Gov Barr Speaks economic outlook/moderated discussion
- 10/09 1300 US Tsy $22B 30Y bond auction re-open (912810UM8)
- 10/09 1300 MN Fed Kashkari & Barr moderated discussion
- 10/09 1545 Fed VC Bowman community banking (text, no Q&A)
- 10/09 2140 SF Fed Daly, moderated discussion Silicon Valley Dir Exchange
- Source: Bloomberg Finance L.P. / MNI
