Credit Focus

Credit Focus | Global 27th January 2020
27th January 2020 Atheneum Team
27th January 2020

Key Atheneum Experts

Former Chief Marketing Officer – Matalan
Former Director of Merchandising – Matalan
Former Region CEO & Chairman – Primark

Key Information

Consumer Goods
HQ – UK
Operations – UK

The price of credit insurance on U.K. fashion retailer Matalan rose to a 2-month high on Monday 20th January, as the company reported Q3 earnings – reflecting clearly the challenges the retailer currently faces. Price of credit-default swaps on Matalan jumped 10 basis points to 826 – the highest since November, signalling 51% odds of a default in five years. Matalan’s £350m bond due Jan 2023 fell 4 pence on the pound so far this month to 93.5.

Key Atheneum Experts

Former Director of Development – Intu
Senior Head of Commercial Finance – Intu
Former Senior Porfolio Director – Landsec (rival)

Key Information

Real Estate
HQ – UK
Operations – UK

Intu is in talks with shareholders and potential new investors for a cash injection to fix its balance sheet. The company will be targeting an equity raise alongside its FY results, which will be released at the end of February. Sources report that the firm are seeking to raise £1bn, but that would only be enough to cover debt maturing in 2021 and not beyond. Last month Intu announced exchanged contracts to dispose of Intu Puerto Venecia the net proceeds of which will be used to repay debt.

Key Atheneum Experts

Former Vice President – Bombardier Commercial Aircraft
Former Sales Director – Bombardier Aerospace
Former Managing Director – Airbus (rival)

Key Information

Industrials
HQ – Canada
Operations – Global

Canadian multinational manufacturer of business jets, public transport vehicles, and high-speed rail train sets, Bombardier, have had their long-term issuer default rating downgraded by Fitch from B- to CCC+. This downgrading comes largely due to sizeable sustained negative free cash flows which have not improved. Operating challenges at Bombardier Transportation and additional costs piling up in long term projects have contributed to this.

Key Atheneum Experts

Former Operational Risk Management Director – Tereos
Former European Sales Director – Tereos
Former Retail & Food Service Marketing Director – Saint Louis Sucre (rival)

Key Information

Commodities
HQ – France
Operations – Global

The French sugar, starch and bioethanol producer, Tereos, have had their outlook changed from stable to negative, by Fitch Ratings, as they expect the company’s free cash flow to deteriorate. Higher procurement costs in Europe and declines in European and international sugar prices have led to a 50% fall in Tereos’ EBITDA to €274m in FY19.

Key Atheneum Experts

Former CFO – McLaren Group
Former Asia Pacific Sales Director – Rolls Royce (rival)
Former Director of VIP and Special Sales – Aston Martin (rival)

Key Information

Automotive
HQ – UK
Operations – Global

McLaren’s new award-winning vehicles, including the Spider, Elva and GT series may provide a platform for the firm toward a stronger operating profitability in 2020. The company’s notes due in 2022 were sluggish over the past year, making their spreads particularly wide, and among the widest in the European automotive high yield sector.