EU BASIC INDUSTRIES: SIG (SIGCBL Baa3/BBB-/NR): New Issue FV
Mar-12 09:14
- Exp. EU500m 5Y MS+155-160.
- We see AMCR (Baa2*-/BBB/BBB+) as a floor for FV despite higher ratings; it has superior margins and leverage, while it’s smaller in scale but a market leader within its segment. Amcor is in the process of merging with Berry Global. This also leaves it in line with rating comp STERV (Baa3/NR/BBB-), a more cyclical paper name.
- See our credit overview here https://www.mnimarkets.com/articles/sig-sigcbl-baa3bbb-nr-roadshow-and-credit-profile-1741708060422. We like the credit fundamentally and we believe it could see higher ratings over time in the absence of M&A. It may benefit from stronger recognition over time as it plans to be a repeat issuer
- We see FV at MS+115a.
Want to read more?
Find more articles and bullets on these widgets:
Historical bullets
BONDS: UK Paper Outperforms German Peers, TTF & UK Labour Market Eyed
Feb-10 09:11
Looks like the fresh 2-year high in TTF prices is facilitating German underperformance vs. UK paper, with UK/German spreads 1.0-1.5bp tighter across the curve early today.
- Continued downbeat assessments surrounding the UK labour market (covered earlier) also a potential factor in the spread narrowing.
EURIBOR OPTIONS: Call condor
Feb-10 09:08
ERM5 97.875/97.9375/98.00/98.0625c condor, bought for 1.5 in 2.5k.
STIR: Goldman Take Profit On ERM5/Z5 Flattener, Recommend Receiving June ECB
Feb-10 09:02
Goldman Sachs note that ECB’s report on r* “de-emphasised the usefulness of neutral rate estimates for policy, a sentiment echoed by ECB speakers. This suggests that the ECB will not be overly constrained by these estimates, and as a result will follow the signals of the upcoming data.”
- In terms of the feedthrough to their market views, they note “with tariff risk opening up the possibility of slightly more front-loaded cuts we take profit on our ERM5/Z5 flattener recommendation and now recommend outright receiving June 2025 ECB-dated OIS, which is pricing less than 3 cuts, and is better suited to give exposure to a renewed build-up of trade tensions.”
