BAT long dated bonds – A far from defensive investment…
12th November 2018
British American Tobacco, the FTSE listed Tobacco company’s bonds and stocks have traded down today (12 Nov-18) due to a press article discussing a potential FDA ban on menthol cigarettes. Menthols last year represented 55% of BAT’s U.S. cigarette sales by volume (Source: WSJ), which makes any potential new regulation in this area a material […] more
A tale of two supermarkets
9th November 2018
We outline recent credit developments at Distribuidora Internacional de Alimentación (“Dia”) and Tesco as well as the impact of the ECB on bond pricing. DIA is predominantly an Iberian supermarket, whose stocks and bonds have experienced something of a roller-coaster ride since October. Unfortunately for DIA and its key stakeholders, the ride is unlikely to […] more
EM – Not fixing the roof while the sun is shining…?
29th August 2018
EM – Not fixing the roof while the sun is shining…? On Friday (24 Aug), S&P downgraded Zambia to B- from B[1] and kept it on a stable outlook. At time of writing (28 Aug), all its USD bonds are trading at spreads of more than 1000bps[2], over the respective US Treasury Note. This is […] more
WPP Sterling Bond – A case study in the risks of benchmark investing
25th May 2018
Advertising giant WPP has been in the headlines for the past few weeks following the departure of its long term CEO, Martin Sorrell. Just this week, Ratings Agency Fitch downgraded the outlook on its bonds to negative, but kept its BBB+ (Investment Grade rating). Reasons Fitch gave for the change included: Pressures building both across […] more
Corporate Hybrids: An insight into recent LME activity
18th May 2018
Why are they issued? Corporate Hybrids are a maturing area of the global fixed income universe that have formed a key part of the Rubrics Global Credit strategy for over six years. These instruments enable corporates to issue tax deductible debt which also benefits from equity credit standing from the major rating agencies. As a […] more
Stress Testing and the Global Economy : Main Drivers and Risks
11th May 2018
At the end of 2017, Antonio Del Favero, Senior Portfolio Strategist highlighted the increasing risk of a correction in 2018 – despite the loose financial conditions at the time. In March, Antonio presented his updated analysis to the Stress Testing and the Global Economy: Main Drivers and Risk event in Zurich. Up for discussion was the […] more
Senior Portfolio Strategist, Antonio Del Favero on Bloomberg Surveillance
10th May 2018
Earlier this week (Wednesday 9 May), Senior Portfolio Manager at Rubrics, Antonio Del Favero featured on Bloomberg Surveillance with Francine Lacqua. Up for discussion was the increasing political risk and its effects on the markets, and the current less synchronised world growth. Watch part one of the discussion focussing on Trump’s decision to withdraw US […] more
Where to next?
16th April 2018
Bond markets are usually a reliable gauge of what’s really going on in the world. The recent flattening of the yield curve is indicating to many that global central banks have failed in their stated objective of reviving inflation. A spectacular failure in many ways given the addition of $22 trillion in global QE coupled […] more
Populism or Protectionism
15th March 2018
After being rudely awoken from their slumber in early February, risk assets have been in consolidation mode. Assuredly, there is plenty for the markets to get their collective ‘heads’ around. The prospect of higher rates in the US, reinforced by a Fed Chair seemingly willing to follow through on rate hikes, the spectre of quantitative […] more
Checking the pulse of Corporate Credit
6th March 2018
While the short-term focus of the markets has recently been on the outcome of the Italian Election, and the proposed Steel and Aluminium Tariffs by President Donald Trump; we note some interesting activity in the Corporate Credit space. Return of the mega-deal? The strong economic backdrop, robust earnings and cheap financing has boosted the confidence […] more
