Obbligazioni societarie HIGH YIELD e oltre, verso frontiere inesplorate - Vol. 2
- Creatore Discussione gionmorg
- Data di Inizio
seneca
Forumer attivo
Di cosa si occupa questa società Grazie
NoWay
It's time to play the game
waltermasoni
Caribbean Trader
- Earlier today, French steel tubes producer Vallourec reported improved results in fourth-quarter 2019, and estimates it will generate EBITDA of €500 million in 2020.
- In addition, the company launched a €800 million rights issue and is set to obtain a new four-year revolving credit facility, which should support a more sustainable capital structure and improved liquidity.
- We are therefore placing our 'B-' ratings on Vallourec and its debt on CreditWatch with positive implications.
- If the transaction closes as planned in early May, we expect to upgrade Vallourec by one notch.
We believe Vallourec's efforts to reduce net debt will lead to a more sustainable capital structure and improved liquidity.
After a few years of material debt increase (As of Dec. 31, 2019, net debt was €2 billion), the company decided to reduce its net debt burden via an €800 million rights issue. Therefore, under our base-case, assuming adjusted EBITDA of about €500 million, we estimate adjusted leverage of 3.0x-3.5x for 2020, compared with about 7x under the existing capital structure as of Dec. 31, 2019. We note that the company completed a similar €1 billion equity increase back in 2016, but challenging markets and restructuring program implementation consumed most the proceeds.
We expect the capital increase will be completed after the extraordinary shareholder meeting (EGM) on April 6, 2020.
We understand core shareholders Bpifrance and Nippon Steel Corp. (both with a 15% stake) are fully supportive of the proposal, and the company's bank syndicate is committed to underwrite the full balance of the rights issue. We also view Vallourec's lender group commitment to provide a new €800 million four-year unsecured revolving credit facility (RCF; fully undrawn at close) upon the transaction close, as positive, because this will alleviate any liquidity pressures over the next 12 months and beyond.
We expect Vallourec's earnings momentum will remain favourable.
The company reported significantly improved full-year 2019 EBITDA of close to €350 million, up from €150 million in 2018. This was thanks to recovering international markets, improving pricing and mix, favorable iron ore mine contribution, and efficiency savings from its transformation plan. Looking to 2020, we expect the rebound in the company's Brazilian activities in fourth-quarter 2019 will allow Vallourec to achieve its €500 million EBITDA target, which is a key rating driver. We believe the company benefits from a very strong competitive position in the region as the sole significant domestic seamless tubes provider for key companies such as Petrobras, TechnipFMC, and Royal Dutch Shell, resulting in good order book visibility for at least the next 12 months (offshore well count will increase materially year on year). In our view, such momentum, together with the company's continued cost cutting initiatives, should more than offset the slowdown in U.S. shale activity.
We believe Vallourec is on track to achieve its earnings and free operating cash flow (FOCF) targets.
waltermasoni
Caribbean Trader
Bombardier Inc. Outlook Revised To Stable From Negative On Announced Sale Of Transportation Business To Alstom S.A.
- 19-Feb-2020 14:05 EST
- Table of Contents
- Bombardier Inc. announced it has entered into an agreement to sell its Bombardier Transportation (BT) division to Alstom S.A. for about US$8.2 billion.
- If the transaction closes as proposed, we expect Bombardier's S&P adjusted debt-to-EBITDA will be 6x-7x with meaningfully lower refinancing risk, and its operations will be entirely focused on business jets.
- As a result, on Feb. 19, 2020, S&P Global Ratings revised its outlook on the company to stable from negative and affirmed its ratings on Bombardier, including its 'B-' issuer credit rating.
- The stable outlook reflects our expectation the proposed transaction will close in the first half of 2021, and will materially reduce leverage and refinancing risk associated with the company's significant debt load.
fedro10
è la somma che fa il totale...
fedro10
è la somma che fa il totale...
fedro10
è la somma che fa il totale...
sorry, lo cancelliamo
