Les Mousquetaires : Back on the bond market with an IG rating

Intermarché Entreprises announced that is planning a new benchmark offering of senior unsecured note with a five-year maturity (Jan. 2030), six months longer than the July 2029 maturity of its first € 300m bond issued last July. Both offerings serve the same purpose, namely to refinance the € 1.1bn syndicated facility obtained in February 2024 to fund the acquisition of the third wave of Casino stores. However, the present offering is likely to be easier to price given that the group obtained an IG rating last November, even if it is at the lowest possible level (BBB-/negative). Although the large-scale acquisition of Casino stores for more than € 2bn since 2023 was fraught with risks, the group financial disclosures at end-June and end-October 2024 were fairly reassuring (solid operating performance and net leverage at the end of 2024, in line with the target). We are reiterating our Buy recommendation on the 5.75% 2029 notes and recommend subscribing to the new bond offering (from the spread of the 2029 notes).