24 February 2016 by lberuti
It was a risk off day across the board, but it was certainly the best “bad day” we had in a while and credit once again outperformed equities. The sell-off felt contained thanks to a good liquidity in all sectors. Of course, even though credit is closing off the day’s widest levels, almost all high beta names saw their risk premia increased, except PEUGOT ( Peugeot SA ). The company announced that it has completed its recovery plan “Back in the Race” one year in advance and that it has massively over achieved its targets with a €3.8bln operating FCF and an industrial net cash position of €4.5bln. A new plan, dubbed “Push to Pass”, directed at sustainable profitable growth will be presented with the 2016 at the beginning of April. Rating agencies will certainly want proof of the sustainability of PEUGOT’s comeback before they act, but investors appear to consider that a return to investment grade could be under way, and they sent the 5 year risk premium of PEUGOT 20bps lower to 281bps.