Today we will look at two corporate debt securities as investment ideas for this week: HerbalifeNutrition Ltd and Ministry of Finance of the Russian Federation
Among the papers with high yield, we will pay attention to the bond of the world famous company HerbalifeNutrition Ltd. due in 2026. The issuer is engaged in the production and sale of weight control products, food products, sports goods, energy and nutritional products, as well as personal care products. Products are sold in more than 90 countries. The headquarters is located in Los Angeles, the company employs 8.9 thousand people.
As of March 31, 2019, Herbalife's revenue and EBITDA for the last 12 months amounted to $ 4.9 billion and $ 0.8 billion, respectively, while net income was fixed at $ 0.4 billion. Moody’s keeps a “stable” outlook on the company's rating change, S&P - a “positive” one. Herbalife shares are traded on the NYSE with a current market capitalization of $ 6.4 billion.
Issue in the amount of $ 400 million was placed in August 2018. On paper, there are 3 call options, the yield of the nearest one (in August 2021 at a price of 103.625%) is 8.4%. We draw attention to the rather high (7.25%) level of coupon on paper.
Last week, the head of the debt department of the Ministry of Finance of the Russian Federation Konstantin Vyshkovsky did not rule out the placement of sovereign eurobonds in dollars or euros this year. At the same time, the volume of placement will be less than in March 2019, when the Russian Federation sold bonds in dollars and euros by 3.9 billion dollars in equivalent.
Recall that in March, the Ministry of Finance of the Russian Federation placed the European issue with maturity in 2025 for 750 million euros. We decided to see how this issue is now positioned against the background of Eurobonds of countries of similar credit rating. In our opinion, the Eurobond of the Ministry of Finance of the Russian Federation looks interesting.
Joint Managing Director
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