Our Experts Comment the Times Series

See All the Comments

Louis Dreyfus Update

11 November 2020 by jbchevrel

Louis Dreyfus Company B.V. (LOUDRE) is one of the world’s biggest traders of crops and foodstuffs. Its CDS is a constituent of iTraxx XOver since series s21 included. Today it was reported that Margarita Louis-Dreyfus (MLD) agreed to sell a 45% stake in LOUDRE to Abu Dhabi sovereign wealth fund ADQ. MLD was Robert Louis-Dreyfus’ wife. She’s now with the FX-manipulating SNB ex-chief Hildebrand. More importantly, she controls 96% of Louis Dreyfus Holding BV, the holding company that owns LOUDRE. Back in January 2020, she paid $825M to add 17% to her stake in the company, after borrowing $1B from Credit Suisse using her existing controlling stake in the company as collateral. Such that Credit Suisse could have been in a position to take control of LOUDRE if she had not been able to refinance her loan. Before that, she had inherited from her husband in 2009 and she had bought out other family members in 2018. Before today’s ADQ headline, LOUDRE 5y CDS was wider by +10bp on the day, and it then snapped tighter -45bp on the day to close at 138bp. LOUDRE is therefore the best performing CDS in iTraxx XOver s34 on the day. In cash space, the €400M 4% Feb22s rallied by almost +1.5pt, implying a Z-spread of roughly 150bp. The bonds are back to their highest level since early March. Pre-COVID these were trading higher than 105pt, then dipped to 83pt (the yield topped 12% and the 2y CDS was marked at close to 1000bp) and now are almost back to 103pt.