Today we will look at two corporate debt securities as investment ideas for this week: United States Steel Corp. and Black Sea Trade and Development Bank
Among the securities with a yield to maturity of 8%, we note the release of the company United States Steel Corp. due in 2025. The issuer is a full-featured producer of steel, sheet metal and tubular products, owning production facilities in North America and Eastern Europe. Founded in 1901, it is among the largest steel companies in the United States. The company employs 17 thousand people. Headquarters is located in Pittsburgh (Pennsylvania).
In 2018, the issuer's revenue and EBITDA amounted to $ 14.2 and $ 1.6 billion, respectively, and net profit reached $ 0.8 billion. Agencies Moody's and S&P hold a “stable” outlook on changing issuer ratings, the agency Fitch - “positive.” Shares of United States Steel Corporation traded on the NYSE with a market capitalization of 2.6 billion dollars.
Eurobond in the amount of 750 million dollars was placed in August 2017. There are 3 call options for the security, the yield of the nearest one (15.08.2020 at 103.438%) is 15.1%.
Currently, the highest-ranking securities among Russian Eurobonds are traditionally considered to be the obligations of Lukoil, Novatek, NLMK and MMK, which have a composite rating of BBB. Meanwhile, there is even more highly rated securities that are relevant to Russia. For example, the Eurobonds of the Black Sea Trade and Development Bank (BSTDB), where the Russian Federation is one of the co-founders, have single A. credit ratings.
BSTDB was created to support the development of the economies of the Black Sea basin countries. Its founders are the governments of 11 states, the bank began operations in 1999. Russia with a share of 16.5% along with Greece and Turkey is one of the largest co-founders.
BSTDB has two dollar Eurobond issues. The newly placed senior issue of the issuer with redemption in June 2024 looks very competitive against the background of securities of comparable credit quality.
Joint Managing Director
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