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Triumph Group, Inc. 09-19 01:48 GMT  
(Report with Analyst's Data Sheet) 
Triumph Group's (TGI) fiscal 2025 first quarter sales and adjusted EBITDAP were disappointing as OEM production delays and lingering aerospace...
Working Capital Pressure by Evan Mann, CFA
Schlumberger N.V. 09-19 01:38 GMT  
(Report with Analyst's Data Sheet) 
Schlumberger N.V. (SLB) posted a strong second quarter and provided an upbeat outlook for the remainder of the year and beyond. The quality of the...
High Quality Growth by T.L. Tsang, CFA
Microsoft 09-19 01:34 GMT  
(Report with Analyst's Data Sheet) 
Microsoft just announced a $60 billion share repurchase program with no expiration date that can be terminated at any time. That replaces a $60 billion...
Buying Back A Few Shares by Dave Novosel, CFA
Raizen SA 09-18 09:57 GMT  
(Report with Analyst's Data Sheet) 
We are initiating coverage of Raizen SA (RAIZBZ). Headquartered in Sao Paulo, Raizen is a joint venture between Cosan S.A. and Royal Dutch Shell Plc, which was...
Melting Pot by Alexandre Dray
Ciena Corporation 09-18 03:06 GMT  
(Report with Analyst's Data Sheet) 
We are initiating coverage of Ciena Corporation (CIEN). Results for the developer and seller of communication networking equipment, software, and...
Slow Going by Stuart Novick, CFA
Kroger 09-18 02:59 GMT  
(Report with Analyst's Data Sheet) 
It's hard to tell the players without a scorecard amid the myriad lawsuits attempting to block Kroger's (KR) acquisition of rival supermarket chain Albertsons (now...
Day In Court by Carol Levenson, CFA
Celanese Corporation 09-18 01:05 GMT  
(Report with Analyst's Data Sheet) 
It has been a bumpy ride for Celanese (CE) bondholders so far in 2024. The company has made some progress chipping away at the large debt balance...
A Longer Road by Jay Cushing, CFA
Aon 09-18 01:01 GMT  
(Report with Analyst's Data Sheet) 
Aon PLC (AON, market cap $76 billion) ranks as the second largest global insurance brokerage and consulting firm, behind Marsh & McLennan (MMC). The company operates...
Brighter Years Ahead by Terri Cancelarich, CFA
Boeing 09-13 14:40 GMT
(Comment)
It seems as though the positive comments in our recent report (dated 9/10/24) on the tentative contract...
Corporate Development by Carol Levenson, CFA
It seems as though the positive comments in our recent report (dated 9/10/24) on the tentative contract agreement with Boeing's machinists were premature, as the membership roundly rejected the agreement yesterday and voted to go on strike. We continue to believe that as horrible as the timing is for Boeing, considering its regulatory issues and strained cash flow, it can withstand a work stoppage of one to two months without undue damage to its credit profile. As a reminder, the last strike in 2008 lasted about two months, federal mediators were called in, and 2008 operating earnings in the Commercial Airplane segment were impacted by an estimated $1.8 billion. The cash flow impact was more severe, of course, as 105 aircraft deliveries were delayed, but as the deliveries resumed, the cash flow was recovered. At the end of this year's second quarter, Boeing had liquidity of $22.6 billion including cash, marketable securities, and untapped credit lines. The timing in 2008 was horrible as well, given the growing global financial crisis. We note the rating agencies took no action on Boeing related to the 2008 strike. This time around, we take some comfort in the fact that having the new CEO at the table could make a difference on both sides, and the duration could be less than in the 2008 strike. We reaffirm our "stable" credit score and our "outperform" on the bonds at T+172.
Kosmos Energy 09-13 14:30 GMT
(Comment)
Last Tuesday, Kosmos issued a $500 million 7-year bond maturing on 10/01/2031 at a price of...
New Issue by Franck Bekaert
Last Tuesday, Kosmos issued a $500 million 7-year bond maturing on 10/01/2031 at a price of 99.996 to yield 8.75% (z-spread+560 bps). This is at the lower end of the initial price talk of a low 9% due to strong investor demand. The new KOS 8.75% 10/2031 offers a fair spread premium of around 45-50 basis points compared to the KOS 7.5% 03/01/2028 senior notes (based on pre-tender prices). The proceeds from this bond will primarily be used to finance a tender offer announced on September 09th, allowing Kosmos to buy back up to $400 million of its $650 million 7.125% 2026 senior notes, with the remaining $100 million allocated for tenders on its $400 million 7.75% 2027 and $450 million 7.5% 2028 senior notes. This issuance extends the company's debt maturity profile without increasing its leverage. In 1H24, Kosmos delivered strong financial results, making significant progress in its key growth projects in Africa and the Gulf of Mexico. The company is on track to achieve a 50% output growth target by year-end, marking the completion of its three-year capital-intensive investment cycle. After this, the company will focus on selective investments in future development, primarily aiming to deleverage its balance sheet.
Methanex 09-12 18:54 GMT
(Comment)
Earlier this week, Methanex (MEOH) agreed to acquire OCI Global's (OCI) international methanol business...
Acquisition by Evan Mann, CFA
Earlier this week, Methanex (MEOH) agreed to acquire OCI Global's (OCI) international methanol business for $2.05 billion or a 7.5x multiple of its EBITDA (including $30 million of expected cost synergies). The transaction is expected to be funded with $1.15 billion of cash, $450 million from new Methanex shares, and the assumption of $450 million of debt and leases. The purchase is expected to close in the first half of 2025 and will increase production by 20%. Pro forma, the acquisition is expected to increase adjusted EBITDA by $275 million on top of an expected $850 million run rate when the new Geismar 3 plant is running at full capacity. On a pro forma basis, leverage at closing will be around 4.0x (up from 3.7x currently) with the goal of de-levering to 2.5-3.0x within 18 months.
Norfolk Southern Corporation 09-12 17:45 GMT
(Comment)
Norfolk Southern's board of directors announced Wednesday that they have...
Management Change by Jay Cushing, CFA
Norfolk Southern's board of directors announced Wednesday that they have immediately terminated president and CEO Alan Shaw after he violated company policies by engaging in a consensual relationship with the company's legal chief. The company announced that CFO Mark George will replace Mr. Shaw as President and CEO. It was a volatile two-year tenure for Mr. Shaw since his appointment as CEO in May of 2022. In early 2023, the railroad suffered a derailment in East Palestine, Ohio resulting in material damage on the ground (the release of hazardous materials) and significant operational and financial damage to the railroad. Over Mr. Shaw's tenure, Norfolk Southern's operating ratio (operating cost/revenue), a key railroad operating efficiency measure, has materially lagged its rail peers. Mr. Shaw had been under significant shareholder pressure over the past year (led by activist Ancora). Ancora's contentious 2Q24 proxy contest led to 3 board seats but fell short of its 7-seat target and desire to oust the CEO. While the timing of the departure of Mr. Shaw was unexpected, we do not think the change in leadership will materially alter the fundamental trajectory of the railroad. We think Mr. George provides some continuity in the C-suite, but the heavy task of narrowing the profitability gap with peers will likely fall on the shoulders of recently appointed COO, John Orr. Execution risk remains elevated but as Norfolk Southern makes progress with its plan to implement precision scheduled railroading, we expect the profitability gap with other North American railroads to gradually narrow over time. Norfolk Southern bond spreads sit at the wider end of the rail spectrum which we view as appropriate given elevated leverage and execution risk versus peers. We reiterate our "stable" credit score and "underperform" rating on the 5.55% notes due 2034 at T+89.
Methanex 09-12 
Targa 09-12 
Canpack 09-12 
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