iguanito
Forumer storico
Teniamola d'occhio, potrebbe avere tagli minimi 1 o 2k
Obbligazioni societarie HIGH YIELD e oltre, verso frontiere inesplorate - Vol. 1
- Creatore Discussione TRADING_IDEAS
- Data di Inizio
- Stato
anche nii era nii CAPITAL CORP come sprint CAPITAL CORP
iguanito
Forumer storico
Ma quella era roba sudamericana!! Questa è america buona!!!
nii era yankee
capt.harlock
MENA IL CAMMELLO FAN CLUB
incrementato transocean 2031 a 73,75, mi fermo perche' comincio ad averne un po' troppine
ieri avevo notato segnali di risveglio della arg discount, oggi confermati, ci sono news?
ieri avevo notato segnali di risveglio della arg discount, oggi confermati, ci sono news?
fabriziof
Forumer storico
Non so ,comincia domenica il periodo elettorale con le primarie ma non seguo molto ,ho una manciata di baires 2020 e basta ,ma mi piacerebbe riprendermi cordoba 2017
sprint corp. & softbank
ŸBoth Softbank and its US subsidiary Sprint have been part of our Top Picks list for quite some time now and we have provided updates on both companies fairly frequently over the past year, most recently for Sprint on 22 May 2015 in the context of a Top Pick bond switch, and for Softbank on 21 July 2015 in the context of its multi-tranche new issue transaction in EUR and USD.
ŸIn our 22 May comment we re-emphasized our view that Sprint was a very special high yield name due to its position as the by far largest issuer of bonds in the USD high yield market (accounting for more than 2% of all outstanding bonds) while our current top pick bond (USD 7.875% 2023, ISIN US85207UAF21) is the largest single high yield bond that was ever launched. It is therefore almost by nature that - as we have elaborated on in our comment last October - all professional high yield investors have the name very high on their radar screen and also assign it a very explicit weighting in their portfolios, which are typically measured against a benchmark such as the BofAML US High Yield index. But while size and liquidity are usually a big positive to have in temporarily very illiquid bond market segments, they sometimes also work in the opposite direction as liquidity allows investors, who have a negative view on the market as a whole, to “abuse” Sprint’s bonds to express this bearish view and sell them short. As a result Sprint bonds are typically more volatile than the high yield market overall, and therefore its bonds outperform in a constructive high yield environment, but tend to underperform the market in a difficult period. But beyond pure technical aspects Sprint has also its considerable operational challenges and is clearly the weakest of the large four US wireless carriers (Verizon, AT&T and T-Mobile USA being the other three). Yet, our investment rational in Sprint is not primarily based on the weak and deteriorating fundamentals and the declining profitability of the company, but it is first and foremost driven by the fact that Sprint since 2013 has its very personal ‘Sugar Daddy’ called Softbank, which acquired an 80% stake for USD 22 billion. The new anchor shareholder not only benefits from an extraordinary degree of financial flexibility to drive Sprint’s future, but it also brings along strong industrial expertise and experience when it comes to turning around an ailing business.
ŸIn our 21 July Bond Flash comment we have once more quite extensively commented on Softbank, its history and its ambitions. Back then we said that “…We have followed and liked the name and its transformation process from a second tier telecom operator in Japan in the mid-2000s into the large global telecom and internet company that it is now for about an entire decade. Softbank has been on our Top Picks in EUR and USD since September 2013 with their only two currently outstanding bond issues maturing in 2020. Both bonds have done very nicely and delivered a total return of 15% over that period or nearly 8% on an annualised basis. At the current price talk we believe that the new bonds also look interesting for reasons that we will elaborate on below, and we therefore intend to add both new 7-year issues in EUR and USD to the Top Picks provided pricing guidance is not materially changed…”. Indeed we have then added two new bonds to the Top Pick list and they have done very well over the past 2 weeks, especially the EUR 4% Softbank 2022, which is now offered at around 104.50.
ŸNow both companies have reported quarterly results for the April-June period of 2015. At Sprint the tentative signs that the operational decline has finally started to bottom out and the turnaround plan is now progressing and bearing fruit, continued in Q2. Even more importantly though Sprint announced that Softbank, with other partners, will set up two separate funding vehicles to help Sprint finance its leasing payments and network upgrades. This kind of arrangement will require money upfront for Sprint to purchase devices, and Softbank has agreed to be a minority investor to help fund the arrangement. The new financing approach got essential as the turnaround has taken its toll on Sprint’s balance sheet with cash reserves tumbling to around USD 2.3 billion during the last quarter from more than 4.1 billion at the end of March. In a surprise appearance on Sprint’s earnings call, Softbank’s legendary CEO Masayoshi Son, while announcing the leasing company transaction, also allayed investors’ fears by saying that he was now confident in Sprint’s plans and his company was not looking to sell its stake. With the funding help from Softbank, Sprint also said that it didn’t expect to need to raise additional capital through public debt or equity markets, nor does it plan to sell spectrum.
ŸSoftbank reported results this morning, which beat expectations on the back of growth in Japan and the encouraging news at Sprint. CEO Son today reiterated last Tuesday’s comment regarding Sprint saying that “…There is light at the end of the tunnel for Sprint. There was a time when I considered selling Sprint as one of the options -- not anymore. We now have an internal plan for turning around Sprint in the next two years…”
ŸBottom line then for us as investors in both Softbank and Sprint bonds: we feel encouraged by the most recent news and statements, which reinforce our view that fixed income instruments of both companies are attractive for risk-prone fixed income investors with single-B rated Sprint remaining obviously a decisively riskier value proposition than high double-B Softbank. We believe that recent news also proves Moody’s right with respect to their new approach to assess Softbank’s credit risk, which we mentioned in our 21 July Bond Flash. Moody’s in an update in July said that it “…will begin including Sprint in its assessment of Softbank’s financial strength, focusing on the consolidated figures. This change in approach clarifies Moody’s view that it cannot rule out the possibility – while not imminent – that Softbank will provide support to Sprint, if needed. Despite recent improvements in customer retention and subscription, it may still take some time for Sprint’s credit metrics to show clear improvements….”. We fully agree with Moody’s assessment, and in fact this view is actually the key reason why we have and keep Sprint’s huge USD 4.25billion 7.875% bond maturing in 2023 on our Top Pick list. Admittedly the Sprint turnaround process will be a long and slow one and new off-balance sheet financing is still debt and doesn’t change the fact that these are further obligations that are going to pile additional liabilities on top of the company. And this is exactly the reason why at least in the short-term investors receive much higher yields for Sprint bonds than they do for Softbank. But it remains our base case scenario that over the medium term yields and spreads of the two companies should converge (implying significant outperformance of Sprint vs Softbank) if all goes according to plan.
ŸBoth Softbank and its US subsidiary Sprint have been part of our Top Picks list for quite some time now and we have provided updates on both companies fairly frequently over the past year, most recently for Sprint on 22 May 2015 in the context of a Top Pick bond switch, and for Softbank on 21 July 2015 in the context of its multi-tranche new issue transaction in EUR and USD.
ŸIn our 22 May comment we re-emphasized our view that Sprint was a very special high yield name due to its position as the by far largest issuer of bonds in the USD high yield market (accounting for more than 2% of all outstanding bonds) while our current top pick bond (USD 7.875% 2023, ISIN US85207UAF21) is the largest single high yield bond that was ever launched. It is therefore almost by nature that - as we have elaborated on in our comment last October - all professional high yield investors have the name very high on their radar screen and also assign it a very explicit weighting in their portfolios, which are typically measured against a benchmark such as the BofAML US High Yield index. But while size and liquidity are usually a big positive to have in temporarily very illiquid bond market segments, they sometimes also work in the opposite direction as liquidity allows investors, who have a negative view on the market as a whole, to “abuse” Sprint’s bonds to express this bearish view and sell them short. As a result Sprint bonds are typically more volatile than the high yield market overall, and therefore its bonds outperform in a constructive high yield environment, but tend to underperform the market in a difficult period. But beyond pure technical aspects Sprint has also its considerable operational challenges and is clearly the weakest of the large four US wireless carriers (Verizon, AT&T and T-Mobile USA being the other three). Yet, our investment rational in Sprint is not primarily based on the weak and deteriorating fundamentals and the declining profitability of the company, but it is first and foremost driven by the fact that Sprint since 2013 has its very personal ‘Sugar Daddy’ called Softbank, which acquired an 80% stake for USD 22 billion. The new anchor shareholder not only benefits from an extraordinary degree of financial flexibility to drive Sprint’s future, but it also brings along strong industrial expertise and experience when it comes to turning around an ailing business.
ŸIn our 21 July Bond Flash comment we have once more quite extensively commented on Softbank, its history and its ambitions. Back then we said that “…We have followed and liked the name and its transformation process from a second tier telecom operator in Japan in the mid-2000s into the large global telecom and internet company that it is now for about an entire decade. Softbank has been on our Top Picks in EUR and USD since September 2013 with their only two currently outstanding bond issues maturing in 2020. Both bonds have done very nicely and delivered a total return of 15% over that period or nearly 8% on an annualised basis. At the current price talk we believe that the new bonds also look interesting for reasons that we will elaborate on below, and we therefore intend to add both new 7-year issues in EUR and USD to the Top Picks provided pricing guidance is not materially changed…”. Indeed we have then added two new bonds to the Top Pick list and they have done very well over the past 2 weeks, especially the EUR 4% Softbank 2022, which is now offered at around 104.50.
ŸNow both companies have reported quarterly results for the April-June period of 2015. At Sprint the tentative signs that the operational decline has finally started to bottom out and the turnaround plan is now progressing and bearing fruit, continued in Q2. Even more importantly though Sprint announced that Softbank, with other partners, will set up two separate funding vehicles to help Sprint finance its leasing payments and network upgrades. This kind of arrangement will require money upfront for Sprint to purchase devices, and Softbank has agreed to be a minority investor to help fund the arrangement. The new financing approach got essential as the turnaround has taken its toll on Sprint’s balance sheet with cash reserves tumbling to around USD 2.3 billion during the last quarter from more than 4.1 billion at the end of March. In a surprise appearance on Sprint’s earnings call, Softbank’s legendary CEO Masayoshi Son, while announcing the leasing company transaction, also allayed investors’ fears by saying that he was now confident in Sprint’s plans and his company was not looking to sell its stake. With the funding help from Softbank, Sprint also said that it didn’t expect to need to raise additional capital through public debt or equity markets, nor does it plan to sell spectrum.
ŸSoftbank reported results this morning, which beat expectations on the back of growth in Japan and the encouraging news at Sprint. CEO Son today reiterated last Tuesday’s comment regarding Sprint saying that “…There is light at the end of the tunnel for Sprint. There was a time when I considered selling Sprint as one of the options -- not anymore. We now have an internal plan for turning around Sprint in the next two years…”
ŸBottom line then for us as investors in both Softbank and Sprint bonds: we feel encouraged by the most recent news and statements, which reinforce our view that fixed income instruments of both companies are attractive for risk-prone fixed income investors with single-B rated Sprint remaining obviously a decisively riskier value proposition than high double-B Softbank. We believe that recent news also proves Moody’s right with respect to their new approach to assess Softbank’s credit risk, which we mentioned in our 21 July Bond Flash. Moody’s in an update in July said that it “…will begin including Sprint in its assessment of Softbank’s financial strength, focusing on the consolidated figures. This change in approach clarifies Moody’s view that it cannot rule out the possibility – while not imminent – that Softbank will provide support to Sprint, if needed. Despite recent improvements in customer retention and subscription, it may still take some time for Sprint’s credit metrics to show clear improvements….”. We fully agree with Moody’s assessment, and in fact this view is actually the key reason why we have and keep Sprint’s huge USD 4.25billion 7.875% bond maturing in 2023 on our Top Pick list. Admittedly the Sprint turnaround process will be a long and slow one and new off-balance sheet financing is still debt and doesn’t change the fact that these are further obligations that are going to pile additional liabilities on top of the company. And this is exactly the reason why at least in the short-term investors receive much higher yields for Sprint bonds than they do for Softbank. But it remains our base case scenario that over the medium term yields and spreads of the two companies should converge (implying significant outperformance of Sprint vs Softbank) if all goes according to plan.
- Stato
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