MARKET SIGNALS
INVESTMENT IDEAS
Today we will look at two debt securities as investment ideas for this week: PT Chandra Asri Petrochemical Tbk. and Petropavlovsk 2016 Ltd.
IDEA #1: PT Chandra Asri Petrochemical Tbk.
In the segment of securities offering yields above 5% and characterized by moderate duration, let us pay attention to the issue of PT Chandra Asri Petrochemical Tbk, an Indonesian producer of petrochemical products. The issuer produces ethylene, propylene, polyethylene, serving both the processing industries in Indonesia and regional export markets. The company’s shares are traded on the Indonesia Stock Exchange with a current market capitalization of $ 11.4 billion. The headquarters is located in Jakarta, the company employs more than 2 thousand people.
The senior unsecured issue with maturity on November 08, 2024 in the amount of $ 0.3 billion was placed in October 2017. 3 call options are provided for the issue, the yield of the closest of them (November 8, 2021 at a price of 102.475%) is 7.1 % The minimum lot for paper is $ 200 thousand. Paper is serviced by NSD.
IDEA #2: Petropavlovsk 2016 Ltd.
In the Russian segment, let’s pay attention to the senior release of Petropavlovsk 2016 Ltd. with maturity in 2022, which, like most domestic securities, is now rewriting price highs. Nevertheless, the yield on the issue (7.5%) still looks very interesting. Now this Eurobond not only offers the highest level of profitability among senior securities with Russian risk and a rating not lower than B-, but also looks quite competitive against the backdrop of bank “eternal” Eurobonds, which are traditionally traded with the highest yields. Note that in August this year, Fitch upgraded the issuer’s credit rating to B- with a “positive” outlook.
Alexey Shternshis
Joint Managing Director
Capital Pi
