CONSUMER STAPLES: Carrefour | 1Q results
Apr-24 15:56
(CAFP; NR/BBB) {CA FP Equity} "*CARREFOUR 1Q FRANCE LFL SALES EX-FUEL, EX-CALENDAR -1.7% *Carrefour...
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PIPELINE: Corporate Bond Update: $1.75B Côte d'Ivoire 10y WAL Launched
Mar-25 15:51
- Date $MM Issuer (Priced *, Launch #)
- 03/25 $4.65B Bausch Health 7NC3 10%a
- 03/25 $2B #LG Energy $400M 3Y +135, $600M 5Y +145, $300M 5Y SOFR+170, $700M 10Y +170
- 03/25 $1.75B #Côte d'Ivoire 10y WAL 8.45%
- 03/25 $1.25B #NWB 3Y SOFR+36
- 03/25 $1.25B #NDB 3Y SOFR +65
- 03/25 $1B #MuniFin WNG 5Y SOFR+46
- 03/25 $1B *JFM 5Y SOFR+64
- 03/25 $1B #IDB 5Y SOFR+49
- 03/25 $800M Xerox $400M 5.5NC2.5, $400M 6NC3
- 03/25 $Benchmark Kingdom of Belgium 10Y SOFR+67a
UK FISCAL: Defence Spending to Increase Headroom by Billions? (2/2)
Mar-25 15:47
- Although it is balanced in spending terms, all aid spending is current spending whereas defence spending is split between current and capital spending. Extra personnel are current spending, but a new helicopter or tank would of course be capital spending. Beyond this, it becomes tricker to classify. For example, rifle ammunition would be current spending, but an ICBM (inter-continental ballistic missile) would count as capital spending (as it would be unlikely to be used in the short-term).
- If we were to assume that half of the GBP13.4bln defence spending was capital-related (a big assumption we have made to make the maths easy), that would therefore open up another GBP6.7bln of headroom under the current budget “stability rule” (using Starmer’s figures).
- Using the OBR’s EFO estimate for defence spending in 2029-30 of GBP17bln it would be even higher at GBP8.5bln.
- More on capital spending and the impact is greater, more than 50% on current spending and the difference is smaller.
- This wasn’t discussed much in sellside previews that we had read – so could lead to an upside surprise in the amount of headroom.
UK FISCAL: Defence Spending to Increase Headroom by Billions? (1/2)
Mar-25 15:46
- There will be an impact on the fiscal rules from the increase in defence spending and reduction in aid.
- Starmer said that the increase to defence spending to 2.5% of GDP by 2027 equates to GBP13.4bln more every year on defence from 2027.
- Previously the target date assumed by the OBR (in its October EFO) was that this would be met by 2029-30 and the OBR noted that this would cost GBP17bln in the final year.
- This was, however, balanced as Starmer says that this would be fully funded by reducing ODA (overseas development assistance i.e. aid) spending to 0.3% of GNI in 2027 (from 0.5%).
- Note that in October the OBR estimated that the cost to increase the ODA budget to 0.7% of GNI (from 0.5% of GNI) would be GBP6.7bln.
- As this will now be reduced to 0.3 % of GNI (i.e. 0.4ppt below the 0.7% end of parliament previous target), you do indeed get to the GBP13.4bln Starmer said would be spent on defence.
