EU CONSUMER CYCLICALS: PVH; S&P stays unch on positive outlook (correct)
Apr-11 17:10
(Baa3 Pos/BBB- stable now)
We saw S&P the most likely to upgrade (if only looking at leverage). Looks like weak sales and threat of losing the 15% of EBITDA it has in China (was added to unreliable entity list) was enough for it to hold off for now. It remains on positive outlook.
- S&P confirms co does not have material imports from China into US (but will have most supply chain in Asia ex. China).
- It sees full loss of China business (15% of EBTIDA) having +0.2-0.3x leverage impact (we saw +0.4x). We see it currently g/n 2.3x/1.8x levered.
- Sees sales falling single digits and gross margin contracting by more than 100bps this year
- PVH is more optimistic guiding for FY revenue and adj. EBIT margins flat-to-up slightly
As we said after earnings ex. potential positive rating action (which looks absent now) near term catalyst do look skewed negative (4Q results were weak - as is 1Q guidance). PVH is one of the most uninteresting-on-levels among retailers.
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US TSYS/SUPPLY: Review 10Y Auction Re-Open
Mar-12 17:04
- Treasury futures inching off moderately weaker levels after the $39B 10Y note auction reopen (91282CMM0) stops through: drawing 4.310% high yield vs. 4.314% WI; 2.59x bid-to-cover vs. 2.48x prior.
- Peripheral stats: indirect take-up recedes to 67.41% vs. 71.55% prior; direct bidder take-up climbs to 19.51% from 13.61% prior; primary dealer take-up 13.08% vs. 14.84% prior.
- The next 10Y auction (re-open) is tentatively scheduled for April 9.
FED: US TSY 9Y-11M NOTE AUCTION: HIGH YLD 4.310%; ALLOTMENT 95.26%
Mar-12 17:02
- US TSY 9Y-11M NOTE AUCTION: HIGH YLD 4.310%; ALLOTMENT 95.26%
- US TSY 9Y-11M NOTE AUCTION: DEALERS TAKE 13.08% OF COMPETITIVES
- US TSY 9Y-11M NOTE AUCTION: DIRECTS TAKE 19.51% OF COMPETITIVES
- US TSY 9Y-11M NOTE AUCTION: INDIRECTS TAKE 67.41% OF COMPETITIVES
- US TSY 9Y-11M AUCTION: BID/CVR 2.59
US TSYS/SUPPLY: WI 10Y
Mar-12 16:56
WI at 4.318% ahead of the $39B 10Y note auction re-open (91282CMM0) cut-off at 1300ET, compares to last month's tail: 4.632% high yield vs. 4.622% WI.
