The 2014 All-Europe Fixed-Income Research Team: Retailing/Consumer Products (HY), No. 3: Patrick Kersting, Navann Ty & team

< The 2014 All-Europe Fixed-Income Research Team

Patrick Kersting, Navann Ty & team
Bank of America Merrill Lynch

First-place appearances:0

Total appearances: 3

Team debut: 2012

Under the guidance of newcomers Patrick Kersting and Navann Ty, Bank of America Merrill Lynch’s squad advances from runner-up to recapture third place. (Former co-leaders Davide Chiesa and Julien Martin left the firm last year.) The London-based analysts track ten names and intend to add coverage this year. “We expect lower-quality credit to tighten more than higher-quality credit in 2014,” says Ty. “This means we generally want to lessen exposure to defensive sectors such as health care. At the individual credit level, however, we are taking a more differentiated view.” For example, in September her team upgraded British health and social services provider Care U.K. from 30 percent overweight to 70 percent. The company beat third-quarter earnings expectations, and the analysts see further upside. “A circa 8.5 percent yield is attractive for a four-year paper, despite the very recent outperformance but year-to-date underperformance,” she notes. Moreover, “we like the stability of management, which recently toned down its M&A ambitions,” Ty adds. This year, Kersting and Ty also headline the No. 3 team in High-Yield Basic Materials, and Kersting joins Teofilo Lasarte in directing the third-place squad in High-Yield Manufacturing/General Industrials. Kersting has since moved on to assume other responsibilities at BofA Merrill.

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