CMA - updated 1-pager post new state guaranteed facility

Dear All, 

Please find the updated 1-pager here.

- We remain long the 21s for 3% of NAV notes at around 93c/E. We see the recently announced EUR1.05b state backed facility as confirmation that both the banks and the government are willing to continue to support the company for as long as possible with the provision of liquidity.

 - As a result, we are now thinking about an additional position in the 22s, currently at 77, subject to some further modelling. The new facility, combined with the estimates from Maersk of a better than expected volumes + rates environment in Q1 and Q2 20, suggest that CMA could have sufficient liquidity for long enough to cover the those bonds in two years' time. Given the geographical and sector diversification of container shipping and the much better capacity situation compared with 2009, we expect the sector to suffer much less than most other cyclical sectors, including travel, capital goods, commodities and air cargo/ground handling. 

- We are not considering the 25s as their recovery is more a function of long-term business solvency as opposed to liquidity in the short to medium term.

-The state guaranteed facility ranks pari passu with the RCF, according to a slide released by CMA after the press release. We believe they would share the same lenders and negative pledge of the RCF.

Any questions, please do not hesitate to contact me, 

Juliano Torii