INTRALOT- Special Comment
We initiated coverage in February with an Underweight recommendation on the Intralot 6.75% 2021 and 5.25% 2024 bonds, concluding that the group’s emerging profile and recent bad track record in tenders would weigh on bond prices. Since then, the 2021 and 2024 bonds have lost around 20-25 points to 86.375 and 78.375 respectively, now yielding at a high 10-12% to worst. The freefall started in May amid concerns over the group’s vulnerably to the Argentinean peso and Turkish lira (around 29% EBITDA), on top of contract losses in Morocco and South Carolina - in favor of Sisal and IGT respectively – which in turn cast doubt on retention of the Turkish contract to be renewed this year.
Intralot is a supplier of integrated gaming and transaction processing systems. Co.'s operating geographical segments are as follow: European Union, which comprises Greece, Italy, Malta, Cyprus, Poland, Luxembourg, Spain, the U.K., Nederland, Romania, Bulgaria, France, Germany, Czech Republic and Slovakia and Republic of Ireland; Other Europe, which comprises Russia, and Moldova; America, which comprises the U.S., Peru, Brazil, Argentina, Mexico, Jamaica, Chile, Colombia, Guatemala, Dominican Republic, Suriname, Uruguay and St. Lucia; as well as Other Countries, which comprises Australia, New Zealand, China, South Africa, Turkey, South Korea, Lebanon, Egypt, Azerbaijan, Taiwan and Morocco.
Spread Research is France's first Rating Agency, registered by ESMA (European Securities and Markets Authority) and a leading European Independent Credit Research firm, founded in 2004 and based in Lyon, France. Our experienced team offer key research services using a wide range of investment strategies and research methodologies for the High Yield, Emerging Markets, Convertibles and Loan Markets.
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