The European Credit Report is authored by David Roden and Ken Poole of Independent Global Research which has been producing event-driven research for more than 10 years. Many companies involved in corporate events, and therefore already subjected to our analysis, have associated credit instruments that can be employed in various trading strategies. The event-driven expertise of European Research Ltd. is therefore leveraged into credit-based strategies in The European Credit Report. Investment ideas may be event-driven, but are not limited to this space. In-depth fundamental research is conducted to determine the operational and financial health of debt-issuing European corporations. This analysis forms the basis on which investment ideas and trading strategies are built. Comprehensive reports on European high-yield and investment grade credits are published 18 to 25 times annually. Bonds issued by non-European companies will be covered opportunistically.
The research service employs a process that begins with the identification of trading strategies through the routine screening of yields and spreads. However, recommendations are based upon the analysis of key fundamental factors affecting the credit spread. The most attractive trading strategies are structured through the analysis of risk between bonds within a given company’s capital structure, or against the company’s equity. Relative value opportunities between the debt securities of two or more companies are also published upon.
Bond prices, company announcements and news flow on companies under coverage are monitored on a daily basis. Updates are routinely published when recommended strategies are impacted by a company’s reorganization, changes in capital structure, earnings reports, and any other material news.
Fundamental and Relative Value– Long and short positions involving bonds and CDS are published on companies and sectors when analyzing a particular company relative to its peers. Trades will also be recommended within the company’s capital structure, and versus the company’s equity.
Convertible Bond vs. Straight Credit – The implied credit spread on convertible bonds relative to straight credit spreads are analyzed to identify opportunities. Often residual credit trades are recommended when analyzing a company’s convertible bonds versus the equity of the company.
Event-Driven Credit Situations - The service identifies opportunities that arise from spin-offs, IPOs and the implications of credit spreads. Mergers, acquisitions, and leveraged buy outs are analyzed to assess the bond risk for the target company and/or bidder(s).
Bond and Bank Loan Covenants – The research process includes a rigorous review of bond and bank loan covenants. The research team will assess limitations on additional leveraging capacity for opportunistic acquisitions as a result of debt covenants. An assessment of bond covenants in anticipation of potential credit spread changes will also be performed. Contact and steady dialogue with David Roden, the Senior Analyst, Ken Poole, and the London-based research team of Independent Global Research, is strongly encouraged. Clients are provided with access to a secure website to download current and historical reports at their convenience.