Insurance Australia Group Limited (IAG, Group) is the parent company of Australia’s largest general insurance group with controlled operations across Australia and New Zealand. It also maintains a minority interest in operations in Malaysia and India. The group provides personal and commercial insurance products through leading brands in both Australia (NRMA, CGU, RACV and SGIC, among others) and New Zealand. IAG is an ASX Top 30 company with a market capitalisation over AUD18.0bn. The Group’s annual gross written premiums are close to AUD12bn.

StockCo recently provided noteholders with an update on their 1H19 performance. Livestock receivables were AUD144m in 1H19, down around 15% in the half, while income was around 10% lower. The slowdown was expected, and is a result of prolonged drought conditions. Credit losses remain very low. We forecast StockCo’s financial performance in FY19 to remain subdued, although we expect the credit profile to remain sound, overall.

One of Australia’s largest pure-play listed residential land developer, Peet Limited (Peet), has launched its first bond not to be listed on the ASX.

Insurance Australia Group (IAG) has launched a new Tier 2 subordinated note with a 2025 call. It is expected to price wider than its November 2018 Tier 2 issuance, with indicative pricing at 3mBBSW+[2.40% to 2.45%], offering an attractive floating rate exposure.

Privium Group (formerly Impact Group) reported its 1H19 results which were generally in-line with our expectations. Total 1H19 revenue was AUD140.1m (compared to our forecast of AUD136.0m) and EBITDA was AUD8.7m (compared to AUD8.8m). We have revised down our FY19 EBITDA forecast from AUD17.6m to AUD16.2m given lower sales volume being achieved, noting the Group’s credit profile regardless remains sound.

The recent price performance of Rackspace Hosting Inc’s (RAX) 2024 bond has concerned investors about the viability of the company. We think the bond is behaving exactly the way a high yield bond is expected to behave.

Revenues increased by 8% to AUD1.58bn while underlying EBITDA declined 2% to AUD120.9m. Given the continued dry weather in Australia and a slow start to the season in Europe Nufarm has revised down its FY19 EBITDA guidance to AUD440m-AUD470m (previously AUD500m-530m). Given the expected leverage by year end FY19 and continued challenging operating conditions, we expect Nufarm’s rating to remain under pressure (as evidenced by its current negative outlook by S&P).

Rackspace Hosting Inc. reported 4Q18 results which were overall sound, with particularly good free cash flow generation. Total revenue increased 6% year on year to USD604m while adjusted EBITDA was relatively stable at USD185m. Rackspace’s largest division, Managed Hosting & Private Cloud grew 5% to USD366m, with 4Q18 recording the highest booking since the LBO.

Mallinckrodt Plc’s results were broadly in line with market expectations. 4Q18 revenues of USD835m increased 5.6% on a constant currency basis, however declined 2.8%. when excluding acquisitions. 4Q18 adjusted EBITDA increased 10% to USD356m, compared to the prior corresponding period.

Dalrymple Bay Coal Terminal (DBCT), located south of Mackay, Queensland, is one of the worlds’ largest coal export terminals. The terminal has a capacity of 85 million tonnes per annum and handles approximately 22% of the world’s metallurgical coal, a key ingredient in the making of steel.

At the current price, we believe Ovato’s 8.25% November 2022 Notes offer fair relative value. While the Group has slightly revised down its FY19 guidance, it announced the closure of one of its plants and additional cost savings. The credit outlook is Stable, noting that establishing a track record of delivering the announced cost savings will be important in the future direction of our credit outlook.

The US FCC has hit pause on their review of the merger for another three weeks to allow additional public comments. CreditSights remain comfortable with their view that the merger will go through and have maintained an Outperform recommendation on Sprint.

A recent newspaper article claiming an RMBS bond default has incensed the bond analyst community, highlighting the unique nature of credit analysis.

New Issue Alert for IAG. The issuance will be 26yr NC 6.25yr-7.25yr subordinated Tier 2 notes issued by IAG, which will refinance the outstanding IAL notes with a 19 March 2019 call.

Operating since 1997, Liberty is a diversified finance company with operations across Australia and, in more recent years, New Zealand. Its products and services include specialty lending, finance and insurance brokering, receivables servicing, consumer insurance underwriting, and funds management.

IMF recently released their 1H19 results, with the company reporting an unaudited net loss after tax of AUD(10.4m). Despite the loss, we forecast IMF to report a material increase in key earnings metrics over the next few years. We have reiterated our Market Perform recommendation, with a Stable credit outlook.

CML recently released their 1H19 results, with the company reporting an unaudited net profit after tax of AUD4.4m, up 161% on the prior corresponding period. We have reiterated our Market Perform recommendation, with a Stable credit outlook.