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 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, 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
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