Altice: Prefer the Credit to the Equity, says BofAML

Per Bank of America Merrill Lynch report published Nov 21:

« Altice shares have lost 50% of their value post results, while the CDS on the holding have increased by 300bps. Management took action with: 1/ the resignation of the CEO and the return of Patrick Drahi to full control of operations, 2/ admission of poor execution in France, now the #1 focus, and 3/ a priority on debt reduction, involving non­core assets and towers disposals. However, ATC also significantly rebased its mid­term expectations on France. Although the steps taken should comfort credit holders, we think the case for the equity is balanced, with long­ term upside on execution, content monetization and domestic consolidation, but unclear valuation support on our reduced forecasts, and a recovery that remains largely dependent on external competitive forces. Unlike Glencore in 2015, we don’t see material value­enhancing options to drive mid­ term outperformance and downgrade to Neutral with a PO of €11. Our credit analyst Nick MacDonald is positive on the credit »

Revue de la semaine sur les marchés

Les investisseurs sont revenus vers les actifs à risque tandis que les marchés obligataires ont légèrement reculé. Le crédit reste une classe d’actif recherchée, avec un nouveau resserrement des spreads. L’un dans l’autre, les portefeuilles intègrent un scénario de croissance économique molle et de recul de la croissance bénéficiaires, mais ils intègrent aussi une réduction des risques extrêmes. Continuer la lecture de « Revue de la semaine sur les marchés »