Spread Research – Independent Credit Research

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

Independent credit research

Spread Research has been founded in 2004 and our team is currently composed of nine credit analysts based in France and Italy who provide fundamental analysis and investment recommendations on the High Yield, Corporate Hybrids and Convertible bond markets.

We deliver our credit research services to a large variety of clients including specialized institutional credit funds, hedge funds, trading desks, private banks, and family offices across our European footprint. Our Coverage includes about 250 issuers of debt on the euro High Yield market. We closely follow 25 Convertible bonds issuers with a High Yield profile and we provide also views balanced profiles of this market.

Proven quality and market expertise over more than two decades impose Spread Research as a strong brand in Europe, at par with the credit research provided by banking institutions. In France, our home market, we are market leader and in Germany, Italy, Switzerland and UK we are among the top providers.

Our recognized expert positioning in Europe translates in record number of quotes in the international financial media including Bloomberg, IFR-Reuters, LCD as well as in the French specialized press such as l’Agefi or Les Echos.

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 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 by publishing timely reports on the customers’ platform, whenever something relevant occurs, i.e earnings results, M&A, debt issuance or litigation.

Our analysts spent record time with clients in the recent period – a couple of hundreds of hours in 2023 for example – answering to questions on default risks, refinancing capacity, new issues, results and sector trends.

Productivity of Spread Research team keeps increasing over years – reaching for example in 2023 almost 1400 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 documents for different needs

Key figures: tables 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 as well as credit news regarding relevant Investment Grade companies.

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 and sector performance on a monthly basis.

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

European Credit Stat: we regularly update the High Yield 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.

Spread Research 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 on the bonds likely to outperform or underperform their respective indexes.

ESG integration

Spread Research has been a pioneer in applying ESG factors to the assessment of the credit risk for the last 20 years.

Rightly anticipating the new paradigm implied by the ESG upheaval, we deliver ad-hoc reports to integrate ESG factors into our fundamental credit analysis. We comment and track Sustainability Performance Targets included in Sustainable Linked Bonds issued by euro High Yield bonds issuers.

We also provide and make regular updates of ESG scores for the majority of the companies within our coverage.

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

Automotive: Adient, ADLER PELZER, Benteler, Clarios (Power Solutions), Dana, Forvia, Gestamp, Grupo Antolin, IHO Verwaltung, Jaguar Land Rover, LKQ, OPmobility, Pasubio, Piaggio, Renault, Schaeffler, Smrp Bv, Standard Profil, Superior Industries, TI Fluid Systems, Volkswagen, ZF

Capital Goods: Belden, Boels, Evoca, Fives, Kiloutou, Loxam, Modulaire (Algeco), Nexans, Pfleiderer, Profine, Purmo Group, Rexel, Rolls-Royce, Thyssenkrupp Elevator, Victoria

Chemicals: Arxada, Azelis, Bayer AG, Cabb, Ineos, INEOS Quattro, Italmatch Chemicals, Kem One, Lenzing, Nobian, Polynt, SNF(Spcm), Synthomer, The Chemours Company

Construction & Utilities:  Consolis, Getlink, OHLA, Paprec, Sacyr, SIG plc, Umicore, Webuild

Consumer Goods: Birkenstock, Boparan, Coty, Energizer, Firmenich, Nomad Foods (Iglo), Ontex, Oriflame, Philips Domestic Appliance, Premier Foods, Rino Mastrotto, Tereos

Debt Collectors: Arrow Global, Axactor, doValue, Encore, Intrum Justitia, IQera, KRUK, Lowell

Gaming: 888, Allwyn International, Cirsa, Codere, IGT, Intralot, Lottomatica, Playtech, Ubisoft

Healthcare: Advanz Pharma, Almirall, Avantor, Biocartis Group, Biocartis Group NV, Biofarma, Biogroup, Catalent, Ceramtec, Cerba, Cheplapharm, Clariane, DiaSorin SpA, Eurofins, Fabbrica Italiana Sintetici, Grifols, Gruenenthal, Iqvia, Marcolin, Neopharmed Gentili, Organon, Recordati, Stada, Sunrise Medical, Synlab, Teva

Metals: Constellium, Novelis, Sgl Carbon, Eramet

Oil&Gas: Cgg, Repsol, Saipem S.p.A., Vallourec, Wintershall Dea

Packaging: Ardagh Group, Ball Corporation, Bormioli Pharma, Canpack, Crown Holdings, Graphic Packaging, Guala Closures, Huhtamaki, Kloeckner Pentaplast, Owens Illinois, Pro-Gest, Progroup, Reno de Medici, Schoeller Allibert, Silgan, Trivium, BEWI ASA

Pulp&Paper: Ahlstrom, Fedrigoni, Graanul Invest, Lecta, Sappi, Wepa

Real Estate: Adler Group, Aedas Homes, Citycon, Heimstaden Bostad, Keepmoat, Miller Homes, Nexity, PHM Group, Signa Development Selection, TAG Immobilien AG, Unibail-Rodamco, Via Celere

Retail: Alain Afflelou, Avolta, Bertrand Franchise, BestSecret, Burger King France, But, Casino Guichard-Perrachon, Cbr Fashion, Ceconomy, Douglas, ELO Group, Eroski, Fnac Darty, GN Store, HelloFresh, HSE24, Iceland Foods, International Design Group, Maisons Du Monde, Matalan, Maxeda, Pepco Group, Picard, Redcare Pharmacy, Samsonite, Stonegate, The Very Group, THOM Group

Services: APCOA, Applus, Assemblin, Atalian , David Lloyd Leisure, Elior, Elis, House of HR, InPost, Just Eat Takeaway.com N.V, PureGym, Q-Park, Rekeep, Selecta, Verisure, Scan Global Logistics

Technology: Almaviva, AMS, Engineering Group, Infineon, Lutech, Mooney, Nexi, Paysafe, Teamsystem, Transcom, AT-T, Telecom Italia

Travel: Accor, Air France – Klm, Avis Budget, Carnival Corporation & PLC, Edreams Odigeo, Finnair, Hurtigruten, Iag, Lufthansa, Merlin Entertainments Plc, Motel One, Nh Hotels, Sani Ikos, Travelodge, TUI Cruises, Tui Group

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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