穆迪-全球-银行业-抵押贷款利息-20171020-MOODY’S-CLO_Interest_30页_3mb

报告摘要

CLO Interest Summary - October 2017

Core Content

This document provides an in-depth analysis of the credit quality and performance of European collateralized loan obligation (CLO) 2.0s, with a specific focus on the telecommunications and media: broadcast & subscription (TMBS) sector. It also includes insights on other European speculative-grade nonfinancial corporate sectors such as chemicals, gaming, and manufacturing.

Main Points

TMBS Sector Overview

TMBS Exposure: The TMBS sector is the second-largest exposure in European CLO 2.0s, accounting for 12.4% of the collateral, or €5.8 billion.
Concentration: Exposure is highly concentrated, with the top 10 issuers representing 78% of the total TMBS exposure.
Key Issuers: Liberty Global and Altice Luxembourg SA account for 35% of TMBS exposure in European CLO 2.0s.
Credit Quality: TMBS issuers have better credit quality than the average CLO-held issuer, with a weighted average rating factor (WARF) of 2441, which is better than the median WARF of 2703 for European CLO 2.0s.
Outlooks: Outlooks for both telecom and cable sectors are stable, with a 12-month speculative-grade default rate expected to remain below 1% for the combined TMBS sectors.

Revenue and Growth Trends

Revenue Growth: Both telecom and cable sectors are expected to see revenue growth rates of around 1% to 2% in 2017.
Cable Growth: Cable operators face continued challenges, with a decline in growth in the Netherlands and the UK due to competition and operational issues.
Telecom Growth: Telecom issuers are expected to see a slight rebound in growth, supported by network investments and customer service improvements.
Market Convergence: The two sectors are increasingly converging in terms of product offerings, leading to more intense competition.

Financial and Operational Factors

Leverage: Most TMBS issuers operate with leverage above the Ba3 rating category, with some at higher levels.
Capital Expenditure: High capital expenditure-to-sales ratios are expected, driven by network expansion and technology upgrades.
M&A Activity: M&A activity is likely to remain within markets, with a focus on convergence between mobile and fixed operators.

Sector-Specific Insights

Chemicals: EBITDA is expected to rise in 2017 but will gradually soften in 2018. The sector benefits from improved pricing and cost-cutting programs.
Gaming: Regulatory changes and tax increases are expected to constrain growth over the next 12-18 months. Consolidation and diversification are key strategies for maintaining competitiveness.
Manufacturing: PMI surveys indicate improving conditions in Europe, the US, and China, though uncertainty over China's growth and the strength of the euro pose challenges.

Key Information

CLO 2.0 Credit Quality

TMBS Exposure: 12.4% of total collateral, with €5.8 billion in value.
Top 10 Issuers: Represent 78% of TMBS exposure, with Liberty Global and Altice Luxembourg SA being the largest contributors.
Default Rates: Expected to be below 1% for the TMBS sectors, compared to 1.3% for all speculative-grade issuers.
Rating Outlooks: Stable for most TMBS issuers, with only two having a negative outlook (VodafoneZiggo and Matterhorn Telecom Holding SA).

Financial Policy and Leverage

Liberty Global: Maintains a leverage range of 4.0x to 5.0x net debt/EBITDA, with some subsidiaries showing weaker performance.
Altice Luxembourg: Has a high leverage of 5.6x and is focused on improving performance rather than pursuing further M&A.
VodafoneZiggo: Has a negative outlook due to high leverage and weak operating performance.

Operational Challenges

Competition: Intense competition in the Netherlands, Switzerland, the UK, Belgium, and France affects revenue growth.
Regulatory Environment: Incumbent telecoms are encouraged to invest in fibre, while cable companies face limited regulatory support in most markets.

Conclusion

The TMBS sector in European CLO 2.0s presents a mixed outlook, with above-average credit quality offsetting competitive pressures. While revenue growth is expected to remain low in 2017, the sector is anticipated to see some improvement in 2018. Other sectors, such as chemicals and gaming, also face unique challenges and opportunities, with financial policies and operational strategies playing a critical role in their credit profiles.

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