Hapag-Lloyd IPO off the table for the time being
“Hold” senior bonds; “Neutral” on its hybrid TUIGR 8.625% trading at a mid price of 75 or a Z-spread of 3,252 bps; “Sell” 1Y CDS at 640 bps (however, rather illiquid and hold to maturity)
According to the Financial Times, Karl Gernandt CEO of Kuehne Holding (a member of the Albert Ballin consortium that controls 62% of Hapag-Lloyd) rules out an IPO of Hapag-Lloyd in the next 12-15 months. He said that the involved parties did not reach a consensus for the IPO. He added that talks with investors from Oman and China about the acquisition of TUI’s stake have been unsuccessful and that he continues to look for a keystone investor, potentially from the PE space. Talks seem to be very challenging. Mr Gernandt’s statements do not come as a surprise and we believe that a disposal of TUI’s stake is not possible under current market conditions. However, TUI has the option to sell its remaining stake to Albert Ballin in January 2012. We maintain our “Hold” recommendation for now. Investors with an appetite for volatility should look at 1Y CDS, which in our view is an attractive (however, rather illiquid) survival trade given the reasonable liquidity of TUI (more than EUR 800 mn of cash) versus very limited short term maturities. Further, the TUIGR 5.125% 12/12 trades at a Z-spread of c. 353 bps, c. 300 bps tighter than the CDS. We keep our “High Risk” assessment on the LARA scale.
“Hold” senior bonds; “Neutral” on its hybrid TUIGR 8.625% trading at a mid price of 75 or a Z-spread of 3,252 bps; “Sell” 1Y CDS at 640 bps (however, rather illiquid and hold to maturity)
According to the Financial Times, Karl Gernandt CEO of Kuehne Holding (a member of the Albert Ballin consortium that controls 62% of Hapag-Lloyd) rules out an IPO of Hapag-Lloyd in the next 12-15 months. He said that the involved parties did not reach a consensus for the IPO. He added that talks with investors from Oman and China about the acquisition of TUI’s stake have been unsuccessful and that he continues to look for a keystone investor, potentially from the PE space. Talks seem to be very challenging. Mr Gernandt’s statements do not come as a surprise and we believe that a disposal of TUI’s stake is not possible under current market conditions. However, TUI has the option to sell its remaining stake to Albert Ballin in January 2012. We maintain our “Hold” recommendation for now. Investors with an appetite for volatility should look at 1Y CDS, which in our view is an attractive (however, rather illiquid) survival trade given the reasonable liquidity of TUI (more than EUR 800 mn of cash) versus very limited short term maturities. Further, the TUIGR 5.125% 12/12 trades at a Z-spread of c. 353 bps, c. 300 bps tighter than the CDS. We keep our “High Risk” assessment on the LARA scale.
