Groupe SEB : Neutral (hold) recommendation on the new SKFP 30 notes
Seb Yesterday, Seb completed the placement of a €500m bond maturing in June 2030. The IPT opened at “ms+185bp area,” then guidance was lowered to “ms+155bp area,” and ultimately the bonds were placed at ms+150bp (coupon 3.625%, reoffer 99.556%). The leads reported that they had received nearly €2.1bn in orders.We are initiating coverage of these new SKFP 30 bonds with a Neutral (hold) recommendation, as the final pricing is virtually in line with our fair value.
In our view, Seb has an Investment Grade profile, given its operating profile and key credit indicators, which is also reflected in the short-term rating assigned to the company by S&P (“A-2”, implying a long-term rating of between A- and BBB) and underpinned by the issuer rating assigned by Ethifinance (BBB/stable). On the market, we estimate that a 5-year BBB/BBB- bond is currently worth between 80bp and 100bp, to which should be added up to 50bp of unrated premium.
See our Issue Focus published yesterday.
SEB is engaged in the design, manufacture and marketing of cookware and small household appliances such as pressure cookers, irons, coffeemakers, deep fryers, toasters, kitchen utensils, breadmakers, mixers, blenders, bathroom scales, vacuum cleaners, fans, heaters, air conditioners and food processors. Co.'s products fall into eight categories: Home comfort, Home care, Food preparation, Linen care, Personal care business, Cookware, Electrical cooking and Beverage preparation. Co.'s brands are All-Clad, Krups, Lagostina, Moulinex, Rowenta, Tefal, Calor/Seb, T-fal/Mirro/WearEver/AirBake/Regal, Arno/ Panex//Rochedo/Penedo/Clock/Samurai/Imusa/Umco, Supor, AsiaVina and Maharaja Whiteline.
Oddo Securities provides securities brokerage and research services. The company offers equity, economic, and derivatives research and credit analysis services. It focuses on insurance, automotive, building materials, pharmaceuticals, telecommunications, information technology, and agri-food industries.
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