< The 2014 All-Europe Fixed-Income Research Team
Reigning supreme for a second straight year, and for the third time in the past four years, is the J.P. Morgan trio led by Alketa (Katie) Ruci. This team also shoots from runner-up to second place in Investment-Grade Retailing/Consumer Products. Ruci reports that her London-based squad made recommendations on 75 issuers last year, 41 of which were high yield. Among these was an August reiteration of the analysts’ overweight rating on the 2015 subordinated bonds of Edcon Holdings, South Africa’s largest clothing retailer. Despite weakness in emerging markets, owing to uncertainty about a potential winding down of the U.S. Federal Reserve’s quantitative-easing scheme, and specific investor concerns over Edcon’s ability to refinance the bonds given the market volatility, they stuck with their long-standing favorite, at a midprice of €89.5. Sure enough, in November the company raised €425 million ($578 million) through a senior secured 13.375 percent bond maturing in 2019 and used the proceeds to repay the 2015 instrument, which was then trading at par. Looking ahead, “the outlook and volatility of commodities costs will remain a key consideration given the impact on margins for food producers in the face of continued sluggish top-line growth,” says Ruci. “We also expect ongoing M&A activity in the sector and refinancing to remain in the headlines.” |