After Moody’s downgraded ArcelorMittal’s debt rating by one notch yesterday, causing it to lose its “investment grade” status, the company has proposed a $2 billion capital increase via shares and mandatory convertible bonds. It will decide what proportion is covered by each of the two offers. Furthermore, it reserves the right, depending on demand, to increase the amount of $2 billion.
Simon Peters (eToro) | This week, the Bitcoin block reward halving will happen, possibly as early as today. We don’t know the exact date and time as it happens automatically after 210,000 blocks are mined rather than a defined date and time, but if you want a New Year’s Eve style countdown, check out Bitcoinblockhalf.com I’ve covered the technical details of halving in previous newsletters, so I won’t go over them again. The important thing to note is that the block reward to miners will halve from 12.5 BTC to 6.25 BTC, hence the name of the event.
Telefónica has finally reached an agreement with Liberty Global to merge its UK businesses, O2 Holdings and Virgin Media UK respectively, and form a 50/50 joint venture. The merger would make the new group the UK market leader with a 34% market share compared to BT’s 32%. This integration is the largest transaction in Telefónica’s history. Whatsmore, it will always be remembered for having happened in the midst of the restrictions determined by the confinement in the two countries.
Repsol has found oil in two important deep-water deposits in the Gulf of Mexico, specifically in the wells known as Polok-1 and Chinwol-1. These are located in Block 29 of the Salina Basin, in the south-east area of the Gulf and off the coasts of the states of Veracruz and Tabasco. The effects of the coronavirus pandemic determined Spanish oil and gas group’s results first quarter 2020 results. It recorded an adjusted net result of 447 million euros, a 27.7% decrease from the 618 million euros a year earlier.
The company acknowledges that it is in the process of negotiating with Liberty Global for a possible integration of its assets in the UK, but there is no guarantee this will be successful or that the final terms will be met. Liberty Global offers pay television, broadband and telephony services in the UK through the Virgin Media brand. In addition, it has a mobile virtual operator or MVNO based on British Telecom’s network that expires at the end of 2021 (which would have already negotiated a switch to Vodafone).
Markus Allenspach, Head Fixed Income Research, Julius Baer | At this stage, the corporate bond market needs support from the Federal Reserve to digest the negative news flow, such as the net tightening of lending standards for commercial and industrial loans in the senior loan officers’ survey published yesterday or the numerous cyclical data showing the depth of the contraction in the current quarter.
Royal Dutch Shell recorded losses of $24 million (22 million euros) in the first three months of 2020, compared to an attributable net profit of $6.001 billion (5.518 billion euros) a year earlier, as a result of the impact of the Great Confinement and the collapse of crude oil prices. The Board of Directors of Royal Dutch Shell has decided to cut the dividend for the first quarter of 2020 to $0.16, compared to $0.47 a year earlier.
ACS has closed the sale of 74% of its stake in a batch of six tranches of ‘shadow toll’ highways in Spain to the Hermes fund. The operation was agreed last November and will generate a capital gain of 40 million euros for the infrastructure firm. The group will keep the remaining 26% of its share in the highways, which it will also continue to manage. Their total and joint value amounts to 950 million euros.
Banco Santander reported attributable profit of €331 million in the first quarter of 2020, 82% less than a year earlier, after recording a net charge of €1.646 billion. This impact was mainly due to a provision of €1.600 billion for the expected deterioration in macroeconomic conditions resulting from the health crisis caused by the Covid-19 pandemic.
Acciona has publicly confirmed its rating from the Canadian agency DBRS. This is a rating that the Spanish firm has had since 2018 for various specific operations in different regions, mainly in North America, but which it has so far not released. Acciona does not have ratings from the main rating agencies. However the company believes that the flexibility of the sector analysis offered by DBRS allows it to more reliably reflect the joint risk of Acciona’s various businesses.