Independent Asian Credit Research, Bondcritic

Warut Promboon

Independent Asian Credit Research

Asian Fixed Income/Frontier Market Research

Bondcritic

Bondcritic, established in 2009, is designed to be an independent credit research voice that helps investors gain insights and unbiased analyses on Asian fixed income market. Our mission is to discover deep-value Asian high-yield and distressed bonds with a bottom-up approach, together with the help of our proprietary ESG (Environmental, Social Development, and Governance) model. At the same time, we focus on bringing investment cases of unrated and unloved issuers to the general public.

Credit

<div class="content-highlight"><h2><strong>Executive summary</strong></h2></div><p>Moody’s upgraded the senior unsecured bond rating of JSW Steel Limited (JSW) to Ba2 from Ba3 on 6-March. The outlook remains stable.</p><p>Key rationales of Moody’s upgrade are:</p><ul>
<li>EBITDA margin not expected to decline (despite raw material prices increase) on rising sales.</li>
<li>Leverage to improve to below 3.0x over the next 12-18 months from Moody’s estimate of 3.3x at 31 March 2018. Such levels are lower than Moody’s threshold for Ba2.</li>
<li>Favorable domestic steel demand supported by government…</li>
</ul>

Executive summaryMoody’s upgraded the senior unsecured bond rating of JSW Steel Limited (JSW) to Ba2 from Ba3 on 6-March. The outlook remains stable.Key rationales of Moody’s upgrade are:
EBITDA margin not expected to decline (despite raw material prices increase) on rising sales.
Leverage to improve to below 3.0x over the next 12-18 months from Moody’s estimate of 3.3x at 31 March 2018. Such levels are lower than Moody’s threshold for Ba2.
Favorable domestic steel demand supported by government…


JSW Steel: Moody's Premature Rating Upgrade

<p>We initiate our coverage on <a href="https://www.smartkarma.com/entities/18561" target="_blank" data-smartkarma-citation="entities:18561:1">JSW Steel Ltd (JSTL IN)</a> (JSW) with a <strong>NEUTRAL</strong> recommendation on all <strong>JSTLIN</strong> complex as we believe the complex is fully-valued against its domestic peers (See Valuation). We see better value in the VEDLN complex ( <a href="https://www.smartkarma.com/entities/22202" target="_blank" data-smartkarma-citation="entities:22202:1">Vedanta Resources PLC (VED LN)</a> ) but also do not recommend selling the JSTLIN complex as we believe its long-term credit outlook is positive on rising EBITDA which could lead to an eventual rating upgrade.</p><p> Our credit view of JSW is stable, reflecting the company’s rising and recurring EBITDA on rising steel demand in India and JSW’s leading market position. These positives are mitigated by management’s appetite for acquisitions, part if not all of which could be financed by debt.</p>

We initiate our coverage on JSW Steel Ltd (JSTL IN) (JSW) with a NEUTRAL recommendation on all JSTLIN complex as we believe the complex is fully-valued against its domestic peers (See Valuation). We see better value in the VEDLN complex ( Vedanta Resources PLC (VED LN) ) but also do not recommend selling the JSTLIN complex as we believe its long-term credit outlook is positive on rising EBITDA which could lead to an eventual rating upgrade. Our credit view of JSW is stable, reflecting the company’s rising and recurring EBITDA on rising steel demand in India and JSW’s leading market position. These positives are mitigated by management’s appetite for acquisitions, part if not all of which could be financed by debt.

JSW Steel: A Race of EBITDA Against Debt

India

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Monnet Ispat & Energy (JSWISPL IN)

JSW Steel: Moody's Premature Rating Upgrade

Executive summaryMoody’s upgraded the senior unsecured bond rating of JSW Steel Limited (JSW) to Ba2 from Ba3 on 6-March. The outlook remains...

Bondcritic

JSW Steel: A Race of EBITDA Against Debt

We initiate our coverage on JSW Steel Ltd (JSTL IN) (JSW) with a NEUTRAL recommendation on all JSTLIN complex as we believe the complex is...

Bondcritic

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