fabriziof
Forumer storico
W la Polonia
Sei pazzo fabri, 5 lotti, sei un pazzo scatenato
Però poi se eri pazzo sino in fondo dovevi mantenere...
ora sono e mi riprometto di essere meno pazzo
Obbligazioni societarie HIGH YIELD e oltre, verso frontiere inesplorate - Vol. 1
- Creatore Discussione TRADING_IDEAS
- Data di Inizio
- Stato
ora sono e mi riprometto di essere meno pazzo
Q2 earnings review: surprise change of CFO; decent results but management concedes weaker outlook
“Hold” all bonds
Yesterday, Europcar released Q2 earnings which included a couple of surprises. First, the company announced the departure of current CFO Charles Desmartis, to be replaced with Claire Giraut effective today. Claire has strong credentials, she was serving as CFO of pharma group Ipsen until very recently. Prior to that, she was CFO of Coflexip Stena Offshore, an engineering and oil services company with dual listing in Paris and NASDAQ. Her initial training was in biotech engineering in Paris. Given her lack of experience in the car leasing space and the travel and transport sector, we think she was chosen due to her experience with listed companies, in particular with dual listings. This leads us to speculate that Eurazeo is in fact preparing to IPO the business and that a dual listing remains a key possibility. This may also explain the swift transition, as typically a CFO needs to have been in post for some time before credibly presenting the business in an IPO. However, in our view, markets need to recover before an IPO would be feasible. The second surprise is a subtle change in the way results have been presented, after which fleet operating lease and fleet depreciation costs stopped being shown explicitly. As a result, it is challenging to properly assess the leverage of the group. From an operations point of view, management kept to its previously stated narrative, saying that Europcar is focussing on profitability and maintaining price discipline whilst keeping costs in check. Management further repeated that Europcar’s fleet is flexible and could adapt to economic conditions. It conceded that the economic environment was weaker than the c. 2% GDP growth assumption at the basis of management’s 2011-2013 growth target of 6% to 6.5%. Certainly, we believe the numbers back this narrative up, with revenues up 0.7% y-o-y and EBITDAR (Adj.) up 1.0% in our estimate. However, given the seasonal peak in the fleet leverage currently stands at 5.0x LTM EBITDAR (Adj.), almost 0.7x up sequentially. Put differently, we calculate debt to currently represent 91% LTV when only including fleet financing, and 123% after including corporate debt and equivalents. We derive comfort from management’s indications that debt has decreased in both July and August as the high season ends, however, we continue to believe Europcar is leveraged to perfection, with operating performance going sideways due to the poor economic environment. Hence, the margin of error remains thin. That said, given the strong liquidity provided by the fleet, we believe Europcar has tools to cope with a downturn, as it successfully did in 2008-2009. Accordingly, we maintain our “Hold” recommendation despite the uncertainty. We maintain our “High Risk” assessment on the LARA scale. For more detail, please refer to our Earnings Flash to be published later today.
iguanito
Forumer storico
Ma come mai è così giù? La trimestrale come è stata?
nik.sala
Money Never Sleeps
TUI Alexey Mordashow increases stake to above 25%
“Hold” senior bonds; “Neutral” on its hybrid TUIGR 8.625% trading at a mid price of 82 or a Z-spread of 2,387 bps; “Sell” 1Y CDS at 650 bps (however, rather illiquid and hold to maturity)
TUI’s largest shareholder Alexey Mordashow (he is also CEO of Severstal) increased his stake in TUI from 20.5% to 25.1%. Mr. Mordashow earlier this year stated that he aims to increase his stake to above 25%. In our view, he is a long term investor and took advantage of the drop in TUI’s share price. Mr. Mordashow is supportive of CEO Frenzel and we believe that his strong involvement will allow Mr. Frenzel to execute his strategy which includes the disposal of all interest in Hapag Lloyd, even though current market conditions are not favorable for a quick exit. We maintain our “Hold” recommendation for now. However, investors who have appetite for volatility should look at 1Y CDS, which in our view is an attractive (however, rather illiquid) survival trade given the reasonable liquidity (more than EUR 800 mn of cash) of TUI AG versus very limited short term maturities. Also the TUIGR 5.125% 12/12 trades at a Z-spread of c. 365 bps, almost 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 82 or a Z-spread of 2,387 bps; “Sell” 1Y CDS at 650 bps (however, rather illiquid and hold to maturity)
TUI’s largest shareholder Alexey Mordashow (he is also CEO of Severstal) increased his stake in TUI from 20.5% to 25.1%. Mr. Mordashow earlier this year stated that he aims to increase his stake to above 25%. In our view, he is a long term investor and took advantage of the drop in TUI’s share price. Mr. Mordashow is supportive of CEO Frenzel and we believe that his strong involvement will allow Mr. Frenzel to execute his strategy which includes the disposal of all interest in Hapag Lloyd, even though current market conditions are not favorable for a quick exit. We maintain our “Hold” recommendation for now. However, investors who have appetite for volatility should look at 1Y CDS, which in our view is an attractive (however, rather illiquid) survival trade given the reasonable liquidity (more than EUR 800 mn of cash) of TUI AG versus very limited short term maturities. Also the TUIGR 5.125% 12/12 trades at a Z-spread of c. 365 bps, almost 300 bps tighter than the CDS. We keep our “High Risk” assessment on the LARA scale.
Alobar
So di non sapere...
Qualcuno ha notizie di Fresenius ed è interessato a questo bond? Di recente ho trovato solo questa news postata da gionmorg:
qquebec
Super Moderator
Fresenius SE & Co. KGaA - Fresenius - the health care group
E' sempre stata molto cara e poco redditizia per i miei gusti
Alobar
So di non sapere...
Avido!E' sempre stata molto cara e poco redditizia per i miei gusti
Germany's Fresenius Medical Care Proposed Senior Unsecured Notes Assigned 'BB' Issue Rating, '3' Recovery Rating
PARIS (Standard & Poor's) Sept. 8, 2011--Standard & Poor's Ratings Services
today said it assigned its 'BB' issue rating to the proposed U.S. dollar- and
euro-denominated senior unsecured notes. We understand that FMC expects the
issue proceeds to be over $800 million. The U.S. dollar denominated tranche is
to be issued Fresenius Medical Care US Finance II, Inc, while the euro
denominated tranche is to be issued by FMC Finance VIII S.A., subsidiaries of
German health care group Fresenius Medical Care AG & Co. KGaA (FMC;
BB/Positive/--). The issue ratings are in line with the corporate credit
rating on FMC. We have also assigned a recovery rating of '3' to the notes,
indicating our expectation of meaningful (50%-70%) recovery in the event of a
payment default. The recovery and issue ratings on FMC's other debt facilities
remain unchanged.
The ratings are subject to our satisfactory review of the final documentation.
At the same time, we affirmed the 'BBB-' issue rating on FMC's senior secured
debt. The '1' recovery rating on this debt remains unchanged, reflecting our
expectation of very high (90%-100%) recovery for debtholders in the event of a
payment default. We also affirmed the 'BB' issue ratings on the senior
unsecured debt. The '3' recovery rating on this debt remains unchanged,
reflecting our expectation of meaningful (50%-70%) recovery for debtholders in
the event of a payment default.
We understand that FMC will use the proceeds of the proposed notes issuance to
finance acquisitions, repay drawings under its revolving credit facility and
accounts receivable facility, and for other general corporate purposes. In our
view, the issuance of the additional notes leads to lower recovery prospects
for the senior unsecured notes given the significant increase in debt at this
level of the capital structure. We have assumed that the company will receive
all the necessary authorizations to complete the contemplated acquisitions,
the value of which would partially offset the additional debt being raised. We
could revise our recovery ratings if these acquisitions were not to be
completed. Recovery prospects could also be negatively affected depending on
the nature of any future debt financing raised to fund the proposed
acquisitions.
The proposed notes are unsecured obligations guaranteed by FMC, Fresenius
Medical Care Holdings, Inc., and Fresenius Medical Care Deutschland GmbH. They
will rank pari passu with the €200 million euro notes due 2012 and 2014, the
€250 million 5.50% senior unsecured notes due 2016, the $500 million 6.875%
senior unsecured notes due 2017, the €300 million 5.25% senior unsecured notes
due 2021, and the $650 million 5.75% senior unsecured notes due 2021.
The proposed notes' documentation restricts the incurrence of additional
indebtedness to compliance with a minimum 2.0x consolidated coverage ratio,
but does not prevent the company from raising, among other things, a general
basket of $900 million of additional indebtedness. The documentation also
includes restrictions on liens, asset disposals, mergers, and
sale-and-leaseback transactions, although it is subject to some carve-outs.
Recovery prospects for the proposed notes are supported by our expectation
that, in a default, the company would be reorganized rather than liquidated.
We base our view on our assessment of FMC's satisfactory business risk profile
and its leading position in North American dialysis services and product
markets.
In order to determine recoveries, we simulate a default. Under our
hypothetical scenario, we envisage, among other things, excessive expansion by
the company, with increasing capital expenditures, higher interest rates on
available bank facilities, and stable demand for dialysis. We have also
assumed the tightening of government reimbursement policies, leading to a loss
of market share and thereby reducing profitability and free cash flow
generation.
We have further assumed the inability to refinance the senior secured debt
when it falls due in 2013. However, we acknowledge that the year of default
could move further out as the company refinances it debt. Over a longer time
period, we believe that FMC could also face the emergence of alternative renal
disease treatment, which would draw private clients away from incumbent
dialysis care providers. But in any case, we have assumed that FMC's capital
structure would be similar to today's at the hypothetical point of default.
This scenario leads to a default in 2013, with EBITDA declining to about
$1,050 million.
At the hypothetical point of default, we value FMC at about $6.4 billion using
a market multiple approach.
We deduct from this stressed enterprise value priority liabilities of about
$2,060 million, comprising about $575 million of enforcement costs, priority
debt facilities that include securitization and pre-petition interest,
European Investment Bank loans, some finance leases, local bilateral bank
lines, and pre-petition interest.
Our assumptions give a residual value of $4.3 billion for FMC. This fully
covers the outstanding senior secured loans and pre-petition interest ($2.7
billion in total), which underpins our recovery rating of '1' (90%-100%
recovery) on this debt. In addition, recovery prospects are strengthened by
the springing lien triggered in the case of a downgrade of FMC to below 'BB-'
or the equivalent.
The residual enterprise value available for the senior noteholders is about
$1.6 billion. The recovery prospects for the outstanding euro notes (not
rated), the $500 million notes due 2017, the €250 million notes due 2016, the
€300 million and $500 million notes due 2021, and the proposed notes are in
the 50%-70% range, yielding our recovery rating of '3'. We note that the
recovery prospects for the unsecured debt instruments significantly decrease
as a result of the proposed bond issuance.
In our simulated default scenario, we have assumed that the $1.2 billion
revolving credit facility and $800 million receivables securitization facility
would be fully drawn at default. We anticipate the total principal outstanding
with respect to the refinanced senior secured facilities to be about $2.7
billion at default. We have also assumed that the €200 million euro notes will
amortize as scheduled, with an outstanding amount of €39 million at default.
PARIS (Standard & Poor's) Sept. 8, 2011--Standard & Poor's Ratings Services
today said it assigned its 'BB' issue rating to the proposed U.S. dollar- and
euro-denominated senior unsecured notes. We understand that FMC expects the
issue proceeds to be over $800 million. The U.S. dollar denominated tranche is
to be issued Fresenius Medical Care US Finance II, Inc, while the euro
denominated tranche is to be issued by FMC Finance VIII S.A., subsidiaries of
German health care group Fresenius Medical Care AG & Co. KGaA (FMC;
BB/Positive/--). The issue ratings are in line with the corporate credit
rating on FMC. We have also assigned a recovery rating of '3' to the notes,
indicating our expectation of meaningful (50%-70%) recovery in the event of a
payment default. The recovery and issue ratings on FMC's other debt facilities
remain unchanged.
The ratings are subject to our satisfactory review of the final documentation.
At the same time, we affirmed the 'BBB-' issue rating on FMC's senior secured
debt. The '1' recovery rating on this debt remains unchanged, reflecting our
expectation of very high (90%-100%) recovery for debtholders in the event of a
payment default. We also affirmed the 'BB' issue ratings on the senior
unsecured debt. The '3' recovery rating on this debt remains unchanged,
reflecting our expectation of meaningful (50%-70%) recovery for debtholders in
the event of a payment default.
We understand that FMC will use the proceeds of the proposed notes issuance to
finance acquisitions, repay drawings under its revolving credit facility and
accounts receivable facility, and for other general corporate purposes. In our
view, the issuance of the additional notes leads to lower recovery prospects
for the senior unsecured notes given the significant increase in debt at this
level of the capital structure. We have assumed that the company will receive
all the necessary authorizations to complete the contemplated acquisitions,
the value of which would partially offset the additional debt being raised. We
could revise our recovery ratings if these acquisitions were not to be
completed. Recovery prospects could also be negatively affected depending on
the nature of any future debt financing raised to fund the proposed
acquisitions.
The proposed notes are unsecured obligations guaranteed by FMC, Fresenius
Medical Care Holdings, Inc., and Fresenius Medical Care Deutschland GmbH. They
will rank pari passu with the €200 million euro notes due 2012 and 2014, the
€250 million 5.50% senior unsecured notes due 2016, the $500 million 6.875%
senior unsecured notes due 2017, the €300 million 5.25% senior unsecured notes
due 2021, and the $650 million 5.75% senior unsecured notes due 2021.
The proposed notes' documentation restricts the incurrence of additional
indebtedness to compliance with a minimum 2.0x consolidated coverage ratio,
but does not prevent the company from raising, among other things, a general
basket of $900 million of additional indebtedness. The documentation also
includes restrictions on liens, asset disposals, mergers, and
sale-and-leaseback transactions, although it is subject to some carve-outs.
Recovery prospects for the proposed notes are supported by our expectation
that, in a default, the company would be reorganized rather than liquidated.
We base our view on our assessment of FMC's satisfactory business risk profile
and its leading position in North American dialysis services and product
markets.
In order to determine recoveries, we simulate a default. Under our
hypothetical scenario, we envisage, among other things, excessive expansion by
the company, with increasing capital expenditures, higher interest rates on
available bank facilities, and stable demand for dialysis. We have also
assumed the tightening of government reimbursement policies, leading to a loss
of market share and thereby reducing profitability and free cash flow
generation.
We have further assumed the inability to refinance the senior secured debt
when it falls due in 2013. However, we acknowledge that the year of default
could move further out as the company refinances it debt. Over a longer time
period, we believe that FMC could also face the emergence of alternative renal
disease treatment, which would draw private clients away from incumbent
dialysis care providers. But in any case, we have assumed that FMC's capital
structure would be similar to today's at the hypothetical point of default.
This scenario leads to a default in 2013, with EBITDA declining to about
$1,050 million.
At the hypothetical point of default, we value FMC at about $6.4 billion using
a market multiple approach.
We deduct from this stressed enterprise value priority liabilities of about
$2,060 million, comprising about $575 million of enforcement costs, priority
debt facilities that include securitization and pre-petition interest,
European Investment Bank loans, some finance leases, local bilateral bank
lines, and pre-petition interest.
Our assumptions give a residual value of $4.3 billion for FMC. This fully
covers the outstanding senior secured loans and pre-petition interest ($2.7
billion in total), which underpins our recovery rating of '1' (90%-100%
recovery) on this debt. In addition, recovery prospects are strengthened by
the springing lien triggered in the case of a downgrade of FMC to below 'BB-'
or the equivalent.
The residual enterprise value available for the senior noteholders is about
$1.6 billion. The recovery prospects for the outstanding euro notes (not
rated), the $500 million notes due 2017, the €250 million notes due 2016, the
€300 million and $500 million notes due 2021, and the proposed notes are in
the 50%-70% range, yielding our recovery rating of '3'. We note that the
recovery prospects for the unsecured debt instruments significantly decrease
as a result of the proposed bond issuance.
In our simulated default scenario, we have assumed that the $1.2 billion
revolving credit facility and $800 million receivables securitization facility
would be fully drawn at default. We anticipate the total principal outstanding
with respect to the refinanced senior secured facilities to be about $2.7
billion at default. We have also assumed that the €200 million euro notes will
amortize as scheduled, with an outstanding amount of €39 million at default.
- Stato
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Obbligazioni societarie
HIGH YIELD e oltre, verso frontiere inesplorate, vol.3
