MARKET SIGNALS
Today we will look at two debt securities as investment ideas for this week:
IDEA #1: Freeport-McMoRan
Let us pay attention to the Eurobonds of one of the world’s largest mining companies, Freeport-McMoRan with maturity in 2034. Freeport-McMoRan produces copper, molybdenum and gold. Proved or probable copper reserves are estimated at 120 billion pounds; gold — more than 30 million ounces and about 3.8 billion pounds of molybdenum reserves. The company’s mines are located in America and Indonesia. The company employs 27 thousand people. The headquarters are located in Phoenix (Arizona, USA). The issuer’s shares are traded on the NYSE with a current market cap of $ 13 billion. Included in the S&P 500 index.
The senior unsecured issue in the amount of $ 800 million (securities remaining in circulation for $ 750 million) was placed in 2014. The issue market is global. One call option is provided on paper six months before maturity. Options for revising coupon level (5.4% per annum) are not provided. The face value and minimum lot on paper are respectively 1 thousand and 2 thousand dollars
IDEA #2: MTS
Last week, following an improvement in Sistema’s ratings, S&P upgraded MTS from BB to BB +. The press release states that MTS’s own credit rating is at BBB-, that is, three steps higher than Sistema, thanks to the company’s leading position in the Russian mobile communications market and strong credit indicators. In particular, the company’s debt to EBITDA ratio is around 2.
Alexey Shternshis
Joint Managing Director
Capital Pi
