MARKET SIGNALS
Today we will look at two corporate debt securities as investment ideas for this week: Macro’s Inc. and GeoProMining
IDEA #1: MACRO’S INC.
Macro’s, Inc., one of the largest and oldest retailers of clothing and accessories in the USA, marks the eurobond segment with interesting returns. The issuer owns a network of 830 department stores covering almost all of the United States. The corporation also addresses mailing catalogs and electronic commerce. The company employs 130 thousand people. Headquarters Macy’s, Inc. located in Cincinnati (Ohio, USA). The issuer’s shares are traded on the NYSE with a current market capitalization of $ 5.3 billion.
A senior unsecured issue in the amount of $ 400 million (securities remaining in the amount of $ 201 million in circulation now) was placed in November 2004. The issue market is global. No coupon revision options are provided. The face value and minimum lot on paper is $ 1,000. The paper is serviced by NSD.
IDEA #2: GEOPROMINING
n the segment of high-yield securities with partially Russian risk, let us pay attention to the GeoProMining Eurobonds posted last month. The issuer is a mining company specializing in the extraction and processing of gold, silver, antimony and copper in Russia and Armenia. Last week, the company presented 6M2019 results, showing improved credit metrics. Thus, the metric “Net debt / EBITDA” amounted to 1.7 (at the end of 2018–2.0). Interest coverage ratio reaches 5.4. S&P and Fitch agencies hold a B + rating for GeoProMining obligations.
The senior 5-year issue of 300 million was placed at 7.75% per annum. Note that from the moment of placement, the paper practically did not affect the rally on international trading floors. GeoProMining issue looks quite competitive against the background of international Eurobonds with a rating of B +.
Alexey Shternshis
Joint Managing Director
Capital Pi
