Davy Morning Equity Briefing

Jul 10, 2020

Market Comment

NTMA hits funding target for 2020 after €1.5bn bond auction

Yesterday (July 9th), the National Treasury Management Agency (NTMA) raised €1.5bn through an auction of three government bonds. Notably, the yield on the €500m raised on the bond maturing in May 2027 was -0.257%, a fresh low for an auction. The transaction brings total NTMA issuance via bond auctions and syndications up to €20bn this year, within its €20-24bn target for 2020. Irish spreads will continue be contained by the ECB PEPP purchases, which should grow towards €10bn by end-2020.

Abbey

Full year results in line with guidance

Abbey’s full year results are in line with guidance provided earlier in May. The company maintained a very strong financial position throughout this cycle, and this will mean it weathers the COVID-19 crisis without any liquidity concerns. Opportunities are likely to present themselves for the company in the land market in the coming year, which Abbey has the resources to capitalise on.

Dalata Hotel Group

Amended debt facility and trading update

Dalata has announced that it has amended its debt facilities. This has changed its covenants until 2022 and increased its liquidity. We believe this removes any residual credit and liquidity risks in a worst case scenario. In addition, trading appears to be slightly better than expected.

Malin Corporation

Poseida IPO – priced at top of its range

The pricing of Poseida’s IPO at the top end of its range at $16 and the increase in the share offering to 14m are indicative of the healthy demand in the IPO. Based on the pricing, the value of Malin’s stake in Poseida increases by 17% to c.€130m, with Malin one step closer to realising a cash exit from this key priority asset. Malin shares are attractively valued at a c.40% discount to fair value per share (FVPS) of c.€8.10, including an updated Poseida value of c.€2.80 per Malin share. Poseida shares begin trading today on the Nasdaq (ticker PSTX).