MARKET SIGNALS
INVESTMENT IDEAS
Today we will look at two debt securities as investment ideas for this week: BT Group plc. and Alfabank
IDEA #1: BT Group plc.
In the segment of relatively high quality securities, let us pay attention to one of the Eurobonds of the British giant BT Group plc. The Issuer is a multinational telecommunications holding company headquartered in London. It operates in approximately 180 countries and is the largest provider of fixed-line, broadband and mobile services in the UK, and also provides subscriber television and IT services. The British market accounts for about 75% of revenue. BT Group plc employs 106 thousand people. The company’s shares are traded on the LSE with a current market capitalization of £ 19 billion. Included in the FTSE 100 index.
The senior unsecured issue with a maturity of December 15, 2030 in the amount of $ 2.8 billion was placed in December 2000. The issue market is global. Note that the issue is characterized by a very high coupon (9.625% per annum) and has a BBB rating from all three Big Three agencies. The face value and minimum lot on paper is $ 1,000. The paper is serviced by NSD. In our opinion, the issue looks very interesting against the background of international analogues.
IDEA #2: Alfabank
While the wave of initial offerings is gradually disappearing, some issuers are still not leaving plans to enter the foreign borrowing market in the very near future. So, last week Alfa Bank chief financial officer Alexei Chukhlov said: “We will monitor the market. We do not exclude the possibility that if interest in our securities is high enough, we can afford to return to the market, including this year. “
Alfa Bank’s range of dollar Eurobonds now includes 5 issues, with the subordinate maturing in 2025, apparently, to be called back on a call option in February 2020. In terms of profitability and risk ratio, we will pay attention to the recently placed subordinated an issue with maturity in 2030 and a call option in April 2025. Note that the paper looks very interesting against the background of international peers.
Alexey Shternshis
Joint Managing Director
Capital Pi
