Reprieve Expected to Aid Telstra's Offshore Issues

Wednesday, December 06, 2000
Now that British Telecommunications' jumbo $10 billion global bond issue is out of the way, Australian Telstra's offshore issues, clear losers in recent sessions, can expect a slight reprieve, analysts said on Wednesday.

But while their spreads were unlikely to narrow much near-term, buying opportunities were emerging for medium to longer term investors, said National Australia Bank's senior analyst Phillip Strano.

Telstra's offshore issues not only offered considerable margin pick-up over comparable domestic issues, but also superior credit protection over many of its European counterparts, Strano said.

For example, the telco's U.S. dollar issue due 2005 was trading at around 80 basis points over swap while its domestic 2006 issue was trading at some 50 basis points.

Further, Telstra's single-A plus ratings from Standard & Poor's has a stable outlook and incorporates moderate flexibility for the company to make further strategic investments.

"There is arbitrage opportunities looking at offshore deals," said an analyst. "Event risks still circle this sector and we're recommending a more defensive stance. Offshore issues in the telco sector increasingly include step-up provisions, providing a greater degree of protection," he added.

BT's issue for instance offered step-up coupons that will rise by a quarter percentage point if its ratings fall at least two notches to triple-B plus or Baa1, and more if cuts ran deeper. The downgrade protection is a feature of other telco bond issues this year, among them Deutsche Telecom's $14.6 billion four-currency June megabond issue.

Maritime Today


The Maritime Industry's original and most viewed E-News Service

Maritime Reporter April 2016 Digital Edition
FREE Maritime Reporter Subscription
Latest Maritime News    rss feeds

Finance

Recent Strength in Dry Bulk Shipping to be Short-Lived

Drewry forecasts dry bulk freight rates in 2016 will be, on average, lower than in 2015, as the medium-to-long term fundamentals for dry bulk shipping will remain challenging,

Pan Ocean on Recovery Path

S. Korea’s Pan Ocean Co.  is expected to see its earnings improve amid rising Baltic Dry Index (BDI) that affects spot contracts accounting for more than half

Offshore Casualty: Harkand Group Collapses

As the prolonged slump in energy prices continues to drag on a number of oil and gas and maritime players, word has it that Harkand Group has succumbed, according to staff reports and a report on www.

 
 
Maritime Careers / Shipboard Positions Naval Architecture Offshore Oil Pod Propulsion Port Authority Ship Electronics Ship Repair Ship Simulators Sonar Winch
rss | archive | history | articles | privacy | contributors | top maritime news | about us | copyright | maritime magazines
maritime security news | shipbuilding news | maritime industry | shipping news | maritime reporting | workboats news | ship design | maritime business

Time taken: 0.0719 sec (14 req/sec)