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Zayo Group Holdings, Inc. 08-23 02:08 GMT  
(Report with Analyst's Data Sheet) 
Zayo Group (ZAYO), the North America and European bandwidth infrastructure provider has become the leading, if not the largest provider of...
Fiber On Tap by Kim Noland
Shire plc 08-23 01:57 GMT  
(Report with Analyst's Data Sheet) 
Shire announced this week that its CFO will be leaving at the end of the year. This is not a confidence builder, especially considering how crucial it is that the...
Promises, Promises by Carol Levenson, CFA
United Company RUSAL Plc 08-22 23:09 GMT  
(Report with Analyst's Data Sheet) 
United Company RUSAL Plc (RUALRU, Rusal) will be publishing its 2Q17 results on 25 August. In light of the trading statement published last...
On A Roll by Alexandre Dray
Dynegy 08-22 16:20 GMT
(Comment)
Dynegy pulled off a big new issue of $850 million of 8.125% senior notes due 2026--we have not been...
New Issue by Kim Noland
Dynegy pulled off a big new issue of $850 million of 8.125% senior notes due 2026--we have not been impressed by DYN's credit fundamentals but investors obviously like the juicy yield. At least DYN is using proceeds for debt reduction to satisfy the 2019 maturity--it used the proceeds along with the $480 million of cash it received from the sale of 2 plants and other other cash on hand to tender for up to $1.25 bn of its outstanding 6.75% notes due in 2019. The interest arbitrage on the new deal v. the coupon on the old is negative but the acquisition of peer Calpine suggests there is a decent market for merchant generator assets, suggesting that nearer term DYN debt will be repaid.
WPX Energy 08-22 13:35 GMT
(Comment)
WPX announced the early results and settlement of its $150 million cash tender offer for notes...
Tender Offer by Philip C. Adams, CFA
WPX announced the early results and settlement of its $150 million cash tender offer for notes maturing in 2020, 2022, and 2023. Almost $455 million of the 7.5% notes due 2020 (Priority 1) were tendered, which means only the 2020 notes will be accepted. Early Tender Notes will receive $1,100 per $1,000 principal amount, including a $30 early tender premium, plus accrued interest. Settlement is today, using proceeds of the $150 million reopening of WPX's 2024 maturity, which also settles today. As we noted August 8, this seems an opportunistic way to reduce interest expense, as well as pushing $150 million of maturities out four years. Good result.
Southern Company 08-22 13:25 GMT
(Comment)
Southern Company's Mississippi Power subsidiary has reached a settlement agreement with key...
Regulatory Development by Philip C. Adams, CFA
Southern Company's Mississippi Power subsidiary has reached a settlement agreement with key interested parties with respect to the rate impact of operating the Kemper County IGCC plant as a combined cycle only plant. Consistent with the Mississippi regulator's July 2017 order, the agreement calls for an annual revenue requirement of $126 million, resulting in no rate increase for customers (however, no mention of a rate reduction for residential customers, which had been encouraged). As a result of the proposed settlement, if approved, Mississippi Power expects to incur $100-200 million of additional pre-tax costs associated with cancellation of the gasification portion of the IGCC plant. Regulatory approval is expected in Q4. Relative to the approximately $4.4 billion of equity contributed by SO from 2011 through mid-2017, this last amount is immaterial, and a reasonably good outcome.
Refinery Industry 08-22 02:24 GMT  
(Report with Analyst's Data Sheet) 
For companies with only limited control over raw material and finished product prices, the four refineries we have in coverage have done reasonably...
Wisdom To Know The Difference by Philip C. Adams, CFA
J.C. Penney 08-22 01:34 GMT  
(Report with Analyst's Data Sheet) 
J.C. Penney's (JCP) fiscal 2017 second quarter adjusted EBITDA was short of the consensus forecast due to higher than anticipated margin pressures caused by...
Inventory Liquidation by Evan Mann, CFA
Macy's 08-22 00:12 GMT
(Comment)
It's an odd time of day and a risky time of the retailing year to be announcing major management changes...
Management Change by Carol Levenson, CFA
It's an odd time of day and a risky time of the retailing year to be announcing major management changes. But late today Macy's announced that Hal Lawton would take over as president of Macy's (presumably this means it is splitting the CEO and president roles previously held by Jeff Gennette). Mr. Lawton comes most recently from eBay (but only since 2015), but was with Home Depot for ten years before that. At the same time, Macy's said it is restructuring its merchandising operations, consolidating merchandising, planning, and private brands. The changes will result in a headcount reduction of 100 and $30 million in annual savings (some of which may be reinvested), after costs of $20-$25 million. Clearly Macy's wants to improve its digital "creds," although we note the announcement referred to organizing its merchandising around five "families-of-business" using traditional physical store terms such as "Center Core." Macy's, like every other traditional retailer, is striving to improve speed and agility using technology and data, and streamlining management may be one way to achieve this. The company has also set a goal of having 40% of its business in exclusive products but did not give a timeline for this. We've never been a big believer in org chart salvation, especially not for retailers, but at least the cost savings should help.
L Brands 08-21 20:03 GMT
(Comment)
Although L Brands' (LB) fiscal 2017 second quarter adjusted EBITDA was slightly better than the...
Earnings by Evan Mann, CFA
Although L Brands' (LB) fiscal 2017 second quarter adjusted EBITDA was slightly better than the consensus forecast, third quarter and full year guidance was disappointing suggesting the turnaround at Victoria's Secret will be slower than we had anticipated. Sales for quarter ended July 29, declined 5% to $2.8 billion on an 8% decrease in comparable sales, worse than the company's mid-single digit guidance. With the adjusted EBITDA margin contracting 240 basis points, second quarter adjusted EBITDA declined 18% to $429 million. For the LTM, leverage was 2.5x (3.9x on a rent adjusted basis), continued modest deterioration from 2.4x in first quarter and 2.3x in fiscal 2016. Reflecting the disappointing first half, LB lowered its fiscal 2017 comparable guidance to down low to mid-single digits from down low-single digits, decreased capital spending $50 million to $800 million, and reduced expected free cash flow to $650-700 million from $750-800 million, still sufficient to cover an estimated $688 million of dividends, but leaving less room for share repurchases. We will update our projections and review our rating shortly.
Braskem S.A. 08-21 19:05 GMT  
(Report with Analyst's Data Sheet) 
The additional EBITDA from the Mexico complex and a capital gain from a divestment are the main reasons for the better results of Braskem S.A. (BRASKM) in...
Rising Costs by Cedric Rimaud, CFA
CenterPoint Energy 08-21 13:32 GMT
(Comment)
CenterPoint Energy Resources is in the market for $300 million of 30-year notes. The...
New Issue by Philip C. Adams, CFA
CenterPoint Energy Resources is in the market for $300 million of 30-year notes. The offer will not grow. Use of proceeds is GCP, including the refinance of outstanding commercial paper (STD was $574 million as of June 30). Initial price talk is T+160-165 bps. CNP-CERC 2037s (rated mid triple-B/low single-A) last traded in size July 24 at T+152, in from T+190 when we said 'repeat outperform' in mid-January. CNP reported strong Q2 results earlier this month, with adjusted EPS of $0.29 per share about $0.07 greater than the average of equity analyst estimates.
Oncor Electric Delivery Company LLC 08-21 12:51 GMT
(Comment)
Sempra Energy made a winning surprise bid for Oncor Electric...
Acquisition by Philip C. Adams, CFA
Sempra Energy made a winning surprise bid for Oncor Electric Delivery, offering $9.45 billion cash to acquire Energy Future Holdings Corp., which indirectly owns 80% of Oncor. The bid topped that of Berkshire Hathaway ($9.0 billion) and a rumored $9.3 billion bid by EFH bondholder Elliott Management (which has now stated it favors SRE's offer over that of BRK). Sempra's press release says the deal will be accretive to Sempra in 2018. The $9.45 billion will be financed by a combination of SRE debt and equity, plus third party equity, and $3 billion of "...expected investment grade debt at the reorganized holding company." SRE expects to own 60% of the reorganized EFH holding company after the transaction. The investor call will be later this week, with details to follow. The BRK bid was a "no-brainer" from a credit perspective, as BRK had more than sufficient cash, and was not depending on dividends from Oncor to service acquisition debt. This structure will require Oncor to upstream dividends to service holding company debt, in addition to whatever distributions SRE and the third party equity provider will require. From our mid-July data sheet, Oncor seems capable of upstreaming $300-350 million of dividends annually (depending on capex budget) over the next several years. SRE has committed to Oncor's financial strength and five-year, $7.5 billion capex program, which we interpret as leaving the PUCT "ring fence" provisions intact.
Sempra Energy 08-21 12:49 GMT
(Comment)
Sempra Energy made a winning surprise bid for Oncor Electric Delivery, offering $9.45 billion...
Acquisition by Philip C. Adams, CFA
Sempra Energy made a winning surprise bid for Oncor Electric Delivery, offering $9.45 billion cash to acquire Energy Future Holdings Corp., which indirectly owns 80% of Oncor. The bid topped that of Berkshire Hathaway ($9.0 billion) and a rumored $9.3 billion bid by EFH bondholder Elliott Management (which has now stated it favors SRE's offer over that of BRK). Sempra's press release says the deal will be accretive to Sempra in 2018. The $9.45 billion will be financed by a combination of SRE debt and equity, plus third party equity, and $3 billion of "...expected investment grade debt at the reorganized holding company." SRE expects to own 60% of the reorganized EFH holding company after the transaction. The investor call will be later this week, with details to follow. The BRK bid was a "no-brainer" from a credit perspective, as BRK had more than sufficient cash, and was not depending on dividends from Oncor to service acquisition debt. This structure will require Oncor to upstream dividends to service holding company debt, in addition to whatever distributions SRE and the third party equity provider will require. From our mid-July data sheet, Oncor seems capable of upstreaming $300-350 million of dividends annually (depending on capex budget) over the next several years. SRE has committed to Oncor's financial strength and five-year, $7.5 billion capex program, which we interpret as leaving the PUCT "ring fence" provisions intact.
Gimme Credit Investment Grade New Industry Report, Refinery Industry: 2017 Outlook..
Gimme Credit Investment Grade has initiated coverage of Amazon.Com .

Mexichem 08-14 
Coltel 08-07 
Teva 08-03 
CODELCO 08-02 
Anthem 07-27 
Kinder Morgan 07-25 
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Aug 14, 2017 | Reuters
CL on Philip Morris - Q- "We like the strong debt-protection measures, geographic and product diversity, and ahead-of-the-pack position with reduced-risk products,"
Aug 7, 2017 | Bloomberg
CL on Teva- Q "I still believe management's top priority is to do something about the elevated leverage.
Aug 1, 2017 | Reuters
CL on International Paper- Q-"It's always a prudent move to address dramatically underfunded pension plans, but probably even more so now in light of uncertainty about corporate tax rates and the likelihood of higher interest rates down the road"
Jul 27, 2017 | Valor International
AD on Fibria tries to sideline Arauco in Eldorado Brasil deal Q - "Fibria's leverage ratio is slightly above its financial rules, which cap debt at 3.5 during investment periods."
Jul 26, 2017 | Bloomberg
DN on Where will AT&T's spending priorities leave bondholders? Q - "My sense is that they're willing to live with much higher leverage than they had before."
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