EUR Corporates: Index Performance
EUR Credit ended the final week of November on a firmer footing, with a broadly constructive tone across the capital structure. After a month marked by alternating risk-on and risk-off sessions, spreads tightened in an orderly manner, led by higher-beta instruments outperforming lower-beta seniors. Corporate Senior spreads tightened by approximately 2–3bps across both financials and non-financials, reflecting steady demand and stable secondary flows.
Weekly Focus: ACS Reinforced 2030 Strategy and Capital Discipline Highlight Value Opportunities in the ACSSM 3.75% €'30s Bond
ACS’s (S&P: BBB- sta; Bond rating: BB+ sta) Nov’25 Investor Day reinforced its strategy of scaling growth through diversified infrastructure platforms while preserving a conservative balance sheet use.
- Leverage discipline: No deviation from the group’s “sub-1x” leverage target (vs 0.7x reported at end-9M25).
- Cash-flow visibility: €1.1-1.3bn average annual Net OCF targeted (2024–26) supported by improving working capital and higher operating efficiency.
- De-risked model: Shift toward lower-risk, collaborative contracts (>85% of total). Here, we take value on the newly-signed partnership with GIP for its data centers.
- Liquidity buffer: of c.€5.5-6bn provides “firepower” available via operating cash flows and divestments to fund future projects while keeping debt stable (we note ACS’ net debt of €2.2bn 9M25, -€173mn lower vs YE24).
Primary Issuance Activity:
As expected given the US holiday, corporate primary supply was muted last week, with seven tranches printing €5.6bn in aggregate (or €6.6bn including hybrids and €7.1bn after accounting for HY primary activity).