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First Data Corp. (FDC) — Managing for Cash and Long-Term PotentialNorth America | ePaymentsWith the recent announcement of a new CEO and President, FDC is forging ahead on operational execution with strong and seasoned leadership. 1H growth expected to face headwinds from drop in regulatory (Durbin) benefits and lackluster domestic economic growth, however, we expect continued emphasis on trimming the cost structure and leveraging the scale of its franchise. Recommendations: Buy 2nd liens and 11.25% sub notes. Neutral on first liens, senior unsecured notes, and 11.75% sub notes. Manish A. Somaiya +1-212-816-9799
High Yield Metals & Mining 2Q Preview — Commodity Markets Continue to WeakenNorth America | Metals & MiningWe revisit our Metals & Mining coverage universe and include updated forecasts and highlight relevant and topical themes to listen for during the upcoming earnings season. Key recommendations in Metals & Mining include Buy on Fortescue senior notes and AK Steel senior secured notes; Sell on US Steel senior notes. Citi’s commodities research team recently revised their price forecasts, reducing estimates for every notable commodity that affects our coverage universe in 2013 and 2014. Richard C Yu +1-212-816-7009
Intelsat S.A. (INTEL) — Overweight the Satellite Industry LeaderNorth America | Satellite CommunicationsWe initiate coverage of Intelsat with an Overweight. We expect INTEL to benefit from rising demand for pay-TV, broadband and mobile communications and expect its reduced interest expense to translate into incremental growth capital expenditures that could drive sales and cash flow growth. We initiate with a Sell on Jackson bonds due 2019-2020, Neutral on Jackson bonds due 202, Buy on Jackson bonds due 2022 – 2023, Neutral on the Luxembourg 2018 notes and Buy on Luxembourg bonds due 2021-2023. David Phipps +1-212-816-7022
High Yield Chemicals 2Q13 Earnings Preview — Blame it on the Rain: Headwinds from Weather & Continued Weak Global Economic BackdropNorth America | Chemicals - MajorWe expect 2Q13 results to be challenged by weather and a continued weak global economic outlook. Strength in key end markets such as the U.S. housing, automotive and energy sectors is a bright spot. North America continues to be cost advantaged relative to Europe and Asia as a result of the shale gas revolution. We highlight key end market trends, YTD issuance, and provide 2Q13 earnings estimates & commentary on each issuer under our coverage with updated capital structures and maturity profiles. James P Finnerty +1-212-816-9599
High Yield Gaming: Q2 2013 Preview — Estimates & Previews for Q2 Reporting SeasonNorth America | GamingQ2 2013 Model Update — We provide our estimates for Q2 2013 and our updated forecasts for 2013 on the following pages. Recommendation Changes — We are downgrading the BYD 9% senior notes due 2020 to Neutral from Buy. We are upgrading the TRIBAL 10.5% 3rd lien notes and TRIBAL 11% unsecured notes to Buy from Neutral. We are upgrading the MGM 7.625% unsecured notes due 2017 to Neutral from Sell. Peter A Dalena +1-212-816-4244
Advanced Micro Devices (AMD) — 2Q 2013: Good Quarter, Changing Mix, Uncertainty RemainsNorth America | SemiconductorsAMD’s results and outlook exceeded consensus. Gaming console revenues are expected to drive sales up 22% sequentially, however, these revenues have a lower margin profile. AMD guided gross margins down 350bp sequentially and provided no long-term targets which left us uncertain about the next few quarters. Specifically, we expect a strong seasonal ramp through 4Q and sharp drop-off in 1Q. We maintain our Underweight on AMD credit, along with our Neutral (2) rating on the company’s senior notes. David Phipps +1-212-816-7022
Hospital Update and Ratings Re-rack — Recommendations, Commentary and Forecasts (CYH, HCA, HMA, IAS, LPNT, THC, UHS, VHS)North America | Health Care FacilitiesUpdates on hospital operators including rating changes, recommendations, commentary, and forecasts. Damien McGough, CFA +1-212-816-7698
United Rentals, Inc. (URI) — 2Q Results In-Line; Well Positioned for Growth and DeleveragingNorth America | MachineryURI 2Q revenues of $1.21bn (+6.5% y-o-y) and adjusted EBITDA of $549mm (+76mm y-o-y) were in-line with our and Street expectations. Management affirmed its full-year guidance across all metrics including revenue, EBITDA, rates, and free cash flow. We continue with our Buy (1) rating on URI 6.125% senior notes (trading ~4pts below May ’13 peak) and 8.375% sub notes (~2pts below May ’13 peak). We are Neutral (2) on other tranches within URI’s cap structure. Manish A. Somaiya +1-212-816-9799
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First Data Corp. (FDC) — Managing for Cash and Long-Term Potential
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