EU AUTOMOTIVE: Volkswagen: Potential Divestment
(VW; Baa1/BBB+/A-neg)
A sale would boost liquidity; FY automotive cash flow guidance was reduced by ~€1.5bn to €1-3bn when updated for tariffs at 2Q results. It has ~€7bn and ~€19bn bonds maturing this and next year respectively, although strong liquidity provides flexibility. Pressure on margins and market share in China remain the key credit drivers.
- Volkswagen has appointed advisors for a potential asset sale, according to Bloomberg.
- Non-core Everllence which makes ship engines and power turbines could be valued above €5bn.
“A spokesperson for Volkswagen said the group is “actively managing its portfolio of investment holdings” and is presently examining strategic options for Everllence.” – BBG
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Historical bullets
MNI: SPAIN JUL HICP -0.3% M/M, +2.7% Y/Y
- MNI: SPAIN JUL HICP -0.3% M/M, +2.7% Y/Y
SILVER TECHS: Recovers Off Support
- RES 4: $41.064 - 1.764 proj of the Apr 7 - 25 - May 15 swing
- RES 3: $40.285 - 1.618 proj of the Apr 7 - 25 - May 15 swing
- RES 2: $40.000 - Psychological round number
- RES 1: $39.655 - 1.500 proj of the Apr 7 - 25 - May 15 swing
- PRICE: $38.376 @ 07:54 BST Aug 13
- SUP 1: $36.216 - Low Jul 31
- SUP 2: $35.285 - Low Jun 24
- SUP 3: $33.940 - 50.0% retracement of the Apr 7 - Jul 23 bull leg
- SUP 4: $32.958 - Low Jun 2
Trend signals in Silver remain bullish despite the unconstructive price action into the end of July. The pullback off the late July highs is considered corrective - particularly as prices have recovered off support at the 50-day EMA, now at $36.895. It has been pierced, but a clear break of it is needed to strengthen a short-term bearish threat and allow for a deeper retracement. This would open $35.285, the Jun 24 low. For bulls, a resumption of gains would refocus attention on the next objective at $39.655 a Fibonacci projection.
GILTS: Opening calls
Gilt calls, 91.82/91.83.
