In today’s briefing:
- Air France‑KLM (AF) SLBs, High Miss Risk Into 2026
- Japanese Companies Aren’t Good at Adjusting Course or Withdrawing in Line with Environmental Changes
Air France‑KLM (AF) SLBs, High Miss Risk Into 2026
- High miss probability: Latest emissions intensity 920 gCO₂e per RTK (YE 2024) vs 851 target for 2025. A 7.5% one‑year cut after flat 2024. Base case miss and event-driven opportunity.
- Catalyst within months: The observation window ends YE 2025. Coupons adjust (up to +75bps) from May 2026 on the 2026s and over 2027-2028 on the 2028s, creating a tradable window.
- How to position: Own selected credit and optionality rather than step‑up carry. Trade around KPI disclosures and verification when the probability of a miss is priced before payments change.
Japanese Companies Aren’t Good at Adjusting Course or Withdrawing in Line with Environmental Changes
- Even in parent-subsidiary listings, which form the core of business portfolio restructuring, some large companies have begun taking action, raising expectations for further improvements in capital profitability.
- Companies that have businesses with low capital profitability often lack clear criteria for exiting those businesses, or even if they have established exit criteria, they aren’t actually applied in practice.
- Some companies still believe they cannot withdraw because establishing clear criteria would create inconsistencies with their current low-return capital business, forcing someone to clarify where responsibility lies.
💡 Before it’s here, it’s on Smartkarma
Sign Up for Free
The Smartkarma Preview Pass is your entry to the Independent Investment Research Network
- ✓ Unlimited Research Summaries
- ✓ Personalised Alerts
- ✓ Custom Watchlists
- ✓ Company Data and News
- ✓ Events & Webinars
