European Event-Driven Analyst

Jesus Rodriguez Aguilar

Event-Driven

<ul>
<li>As a result of the deal with KKR, <a href="https://www.smartkarma.com/entities/telecom-italia-spa" target="_blank" data-smartkarma-citation="entities:21075:1" rel="noopener">Telecom Italia SPA (TIT IM)</a> projects a decrease in net debt of about €14 billion, bringing Net Debt/EBITDAaL from &gt;4.5x to around 2.0x.</li>
<li>This should guarantee the survival of Telecom Italia, but Vivendi is ready to challenge the decision. Equity is volatile as net debt represents 3.7x the market cap. Debt looks more interesting.</li>
<li>TLIT 6.875 FEB-2028 with YTM 6.624, or TLIT 7.875 JUL-2028, with YTM 6.838, likely to profit from a rating upgrade. Savings shares are unlikely to receive a dividend until 2027.</li>
</ul>


As a result of the deal with KKR, Telecom Italia SPA (TIT IM) projects a decrease in net debt of about €14 billion, bringing Net Debt/EBITDAaL from &gt;4.5x to around 2.0x.
This should guarantee the survival of Telecom Italia, but Vivendi is ready to challenge the decision. Equity is volatile as net debt represents 3.7x the market cap. Debt looks more interesting.
TLIT 6.875 FEB-2028 with YTM 6.624, or TLIT 7.875 JUL-2028, with YTM 6.838, likely to profit from a rating upgrade. Savings shares are unlikely to receive a dividend until 2027.


Senior Credit Analyst, Lucror Analytics

Leonard Law, CFA

Senior Credit Analyst

High Yield Experts

Lucror Analytics

Lucror Analytics is a leading credit and ESG research specialist and a provider of technology solutions for differentiated fixed income strategies. Our roots are in bottom-up fundamental credit analysis with a specialization in high yield corporate credits from Europe, Asia and Latin America. We are one of few research specialists integrating ESG considerations with fundamental credit research through a dedicated ESG platform. Our ESG assessment covers five key criteria: Disclosure, E,S, & G Pillars, Controversies, ESG Impact on Credit and ESG Momentum.

Recognizing the importance and value-add of Factor Investing in fixed income, Lucror developed the Smart Quant Navigator (SQN), an intuitive platform that helps clients devise and implement factor-based strategies ranging from pure quant to active fundamental, with integrated ESG.

Our company has been at the forefront of developments in the fixed income markets, identifying opportunities and consistently delivering new products and value-adding solutions to clients. Lucror has close relationships with the largest and most reputable asset managers, family offices, hedge funds, investment and wealth managers globally.

Lucror Analytics' ESG Scores are based on a 3-tiered scale and are adjusted for Controversies (if applicable). We assess Telecom Italia's ESG as "Adequate", in line with its "Adequate" Social and Governance scores. While the company has a "Strong" Environmental score, this pillar has the lowest weightage in our assessment of companies in the telecom sector. Controversies are "Immaterial" and Disclosure is "Strong".

Lucror Analytics' ESG Scores are based on a 3-tiered scale and are adjusted for Controversies (if applicable).  We assess Telecom Italia's ESG as "Adequate", in line with its "Adequate" Social and Governance scores. While the company has a "Strong" Environmental score, this pillar has the lowest weightage in our assessment of companies in the telecom sector. Controversies are "Immaterial" and Disclosure is "Strong". 

Telecom Italia - ESG Report - Lucror Analytics

<ul>
<li>Since mid-November, spreads have generally widened across our European liquid universe of ordinary and preferred shares (9 have tightened, 10 widened).</li>
<li>Recommended trades long preferred / short ordinary shares: Media-for-Europe, Sixt, Volkswagen (still the most interesting situation).</li>
<li>Recommended trades long ordinary / short preferred shares: Fuchs, Henkel, SSAB Svenska Stal.</li>
</ul>


Since mid-November, spreads have generally widened across our European liquid universe of ordinary and preferred shares (9 have tightened, 10 widened).
Recommended trades long preferred / short ordinary shares: Media-for-Europe, Sixt, Volkswagen (still the most interesting situation).
Recommended trades long ordinary / short preferred shares: Fuchs, Henkel, SSAB Svenska Stal.


Liquid Universe of European Ordinary and Preferred Shares: December‘23 Report

Credit

In this report, we analyse the impact of the Ukraine-Russia conflict on the various sectors and companies in our European coverage universe. We also include a list of bonds for which we see good value. The direct impact from the actions taken to stop the war (including sanctions) should be insignificant or moderate for most companies under our coverage, but these names could be severely affected: Air Baltic, Consolis, Kem One, KME, Lecta, Naviera Armas, Nobian, Nordex, Norican, Oriflame, Pro-Gest, Profine, Raffinerie Heide, Stada and Vedanta Resources.

  In this report, we analyse the impact of the Ukraine-Russia conflict on the various sectors and companies in our European coverage universe. We also include a list of bonds for which we see good value. The direct impact from the actions taken to stop the war (including sanctions) should be insignificant or moderate for most companies under our coverage, but these names could be severely affected: Air Baltic, Consolis, Kem One, KME, Lecta, Naviera Armas, Nobian, Nordex, Norican, Oriflame, Pro-Gest, Profine, Raffinerie Heide, Stada and Vedanta Resources. 

Impact Of Ukraine Conflict On Lucror’S European Coverage Universe - Lucror Analytics

<ul>
<li>Spreads have generally tightened across our liquid universe, 450 bps in the case of Volkswagen.</li>
<li>Recommendations Long ords / short prefs: Fuchs Petrolub, Henkel, Handelsbanken, Investor AB.</li>
<li>Recommendations Long prefs / short ords: BMW, Roche, Schroders, Telecom Italia, Volkswagen.</li>
</ul>


Spreads have generally tightened across our liquid universe, 450 bps in the case of Volkswagen.
Recommendations Long ords / short prefs: Fuchs Petrolub, Henkel, Handelsbanken, Investor AB.
Recommendations Long prefs / short ords: BMW, Roche, Schroders, Telecom Italia, Volkswagen.


Liquid Universe of European Ordinary and Preferred Shares: January '22 Report

Italy

Telecom Italia S.p.A., through subsidiaries, offers fixed line and mobile telephone and data transmission services in Italy and abroad. The Company offers local and long-distance telephone, satellite communications, Internet access, and teleconferencing services.

Telecom Italia SpA/Milano (TITR IM)

KKR/Telecom Italia: Uncertainty Endures

Telecom Italia expects a significant decrease in net debt through a deal with KKR, ensuring its survival. Vivendi plans to contest the decision....

Jesus Rodriguez Aguilar

Telecom Italia - ESG Report - Lucror Analytics

Lucror Analytics' ESG Scores are based on a 3-tiered scale and are adjusted for Controversies (if applicable). We assess Telecom Italia's ESG as...

Lucror Analytics

Liquid Universe of European Ordinary and Preferred Shares: December‘23 Report

Since mid-November, spreads have generally widened across our European liquid universe of ordinary and preferred shares (9 have tightened, 10...

Jesus Rodriguez Aguilar

Impact Of Ukraine Conflict On Lucror’S European Coverage Universe - Lucror Analytics

In this report, we analyse the impact of the Ukraine-Russia conflict on the various sectors and companies in our European coverage universe. We...

Lucror Analytics

Liquid Universe of European Ordinary and Preferred Shares: January '22 Report

This report contains a table with a selection of European companies with non-voting shares and ordinary shares. Spreads have generally...

Jesus Rodriguez Aguilar

KKR/Telecom Italia: Uncertainty Endures

​Telecom Italia expects a significant decrease in net debt through a deal with KKR, ensuring its survival. Vivendi plans to contest the decision....

Jesus Rodriguez Aguilar

Telecom Italia - ESG Report - Lucror Analytics

Lucror Analytics' ESG Scores are based on a 3-tiered scale and are adjusted for Controversies (if applicable). We assess Telecom Italia's ESG as...

Lucror Analytics

Liquid Universe of European Ordinary and Preferred Shares: December‘23 Report

Since mid-November, spreads have generally widened across our European liquid universe of ordinary and preferred shares (9 have tightened, 10...

Jesus Rodriguez Aguilar

Impact Of Ukraine Conflict On Lucror’S European Coverage Universe - Lucror Analytics

In this report, we analyse the impact of the Ukraine-Russia conflict on the various sectors and companies in our European coverage universe. We...

Lucror Analytics

Liquid Universe of European Ordinary and Preferred Shares: January '22 Report

This report contains a table with a selection of European companies with non-voting shares and ordinary shares. Spreads have generally...

Jesus Rodriguez Aguilar

Telecom Italia expects a significant decrease in net debt through a deal with KKR, ensuring its survival. Vivendi plans to contest the decision....