Independent Research – Spread Research

Through its Spread Research brand, EthiFinance ranks among the leading independent credit research providers in Europe.

Independent credit research

Our company was founded in 2004 and has currently 9 Credit Analysts based in France and Italy. This includes 8 Corporate Credit Analysts covering the whole Euro High Yield market and 1 lead analyst in charge of the European Convertible Bond market. 

Our team of experienced analysts provide fundamental research services and investment recommendations on the High-yield, Corporate Hybrids and Convertible bond markets for many clients including specialized institutional credit funds, hedge funds, trading desks, private banks, and family offices across our European footprint. Our research covers about 250 issuers of debt in EUR on the Euro High Yield market. We closely follow 25 CB issuers with a HY profile and the rest of the market with a balanced profile. 

Proven quality and market expertise over more than two decades has Spread Research a strong brand in Europe at par with Research from Banks. We are market leader France, our home market, and among leaders in Germany, Italy, Switzerland and the UK. 

Recognized expert positioning in Europe translates in record number of quotes in the European financial press in 2023 (126) in the leverage finance space (Bloomberg, IFR-Reuters, LCD) or French financial press. 

Spread Research’s services also include ESG analysis of the credit research portfolio, based on a methodology developed internally which aims to better integrate the consideration of ESG factors into the assessment of credit risk. 

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Client benefits

Timely "Live" Research Responsiveness

We provide direct access to analysts through Conferences, one-to-one Meetings or direct calls. We react to corporate newsflows with the publishing on the customer portal of timely reports whenever something relevant occurs, i.e earnings results, M&A, debt issuance or litigation.  

In 2023, our analysts have spent record time with clients (c. 200 hours), due to questions on default risks, refinancing capacity, new issues, results and sector trends. 

In 2023, the Credit Research team had a record productivity with c. 1,390 documents published. Reactivity to the newsflow or the primary market is key. We provide detailed financial forecast, business model analysis and covenant analysis in due time whenever a new issue is announced.

Different of documents for different needs

Key figures: table with key financial ratios are available in Excel format. 

Daily Morning Letter: we publish a Market Wrap and comment fresh news relevant for High Yield investors ad well as credit news regarding IG names for which we see a read-across. 

Quarterly Results Analysis: detailed quarterly comments and our analysts’ opinions evaluating the financial situation of the companies. 

Newsflow comment: timely Research regarding debt refinancing, M&A, ESG issues, litigation, asset disposals, guidance updates or any news materially affecting an issuer’s credit quality. 

New Issue Theoretical Pricing: following the Primary market Snapshot and New Issue Comment, our analysts define a theoretical spread for each new issue. 

European Monthly Report: we summarize key thematic trends, new issues, sector performance on a monthly basis.  

Sector comment: we identify fundamental credit drivers by sector, new issues, best and worst returns analysis and those bonds able to outperform the sector. 

European Credit Stat: we make regular update about the asset class regarding liquidity by rating and sectors covered and credit ratios based on most recent forecast. 

Annual prospects: published Mid December, this c. 180 pages document summaries our credit view on each sector and Strategic allocation and views on spread, new issues and key trends. 

SR High Yield Priority List: our analysts update the performance of a model high yield bonds portfolio and provide their credit view on each line. 

Top Picks- Top Pans: Our high convictions in the bonds likely to outperform or underperform their respective indexes. 

ESG integration

Spread Research has been a pioneer in Credit Research for the last 20 years. 

Rightly anticipating the new paradigm implied by the ESG upheaval, we delivered ad-hoc reports to integrate ESG factors into our fundamental credit analysis. We comment and track SPTs included in Sustainable Linked Bonds issued by Euro High Yield issuers. Last, we provide and make regular updates of ESG scores for the majority of names under coverage. 

To achieve this timely and consistently, we have tied-up with EthiFinance, the leading sustainability rating agency with 20 years expertise under its belt. 

Use Cases

Key investor’s attention : credit metrics and forecast

Understanding credit trends among sectors and ratings while tracking corporate liquidity is key. This was at the center of SR’s focus during the Covid-19 crisis when we identified businesses which were considered as essential. This remained true when natural gas prices surged in Europe and triggered a sharp rise of inflation and interest rates. 

In light of these needs, SR regularly publishes the European High-Yield Credit Stats. In this report, we outline our most significant recent forecast adjustments, credit ratios by sector, credit ratios by rating, data on liquidity and debt stock, and an overview of the primary market. The European High Yield Credit Stats is published on a quarterly basis. It is based on SR proprietary data, which directly stems from updated financial models. 

Key investor’s attention : the new issue market

Following the Primary market, our analysts define a theoretical spread for each new issue. Delivering a quick credit analysis is crucial, in particular when assessing a newcomer in the market. We identify the best peers and compare businesses with one another to asses SR fair price. We provide minimum yield and spread which we view as fair notwithstanding IPTs if any.  As visibility on inflation and the improvement of economic trends remain low in the eurozone, bond refinancings have dominated in 2024, with a growing number of opportunistic refinancing debt transactions.  

On June 17, 2024, BestSecret, one the leading off-price fashion players in Europe which serves customers across 27 countries, has announced an issue of new 5NC1 EUR550m floating rate notes. It intends to use the gross proceeds from the issuance, along with €113m of cash, to (i) repay and redeem its existing notes (€400m); (ii) fund a distribution to the shareholder (€250m); and (iii) pay fees and expenses in relation to the proposed transaction (€13m). The new bonds are rated B1/B+, in line with existing bonds. On 18 June, we provided a detailed credit of the BestSecret and our fair price before the new notes were priced. 

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