16 June 2017 by pdonnat
CNH was rewarded today for its good management over the recent years.
Sandard Poor’s upgraded CNH (CNH Industrial NV) from BB+ to BBB-.
The rating agency is rewarding a conservative financial policy despite a challenging operating environment.
The agency is the first to upgrade CNH to an investment grade (IG) rating. The CDS market reacted sharply.
The CDS traded down to 87bps from 140bps at yesterday close.
CNH is the spin-off of Fiat’s capital goods activities in 2011. CNH stands for Case New Holland.
CNH main business is the agricultural and construction equipment.
Its main competitors are DE (Deere & Company) and CAT
(Caterpillar Inc.) which CDS are respectively trading at 28bps and 38bps.
The financial cost of CNH will be closer to its competitors.
Next year, CNH has 2B€ out of an 8B€ bond program to refinance. Being an IG issuer will make a difference.
CNH CDS tightening raises again the dispersion within the European high yield market. Over the last most, credit positive stories are going along with very concerning credit stories.