2014-04-01 07:57:48 - According to Laureate BVI, the conflict in the Ukraine has made certain assets such as Metinvest BV bonds trade below fair value.
Laureate BVI issued a Speculative Buy rating on Metinvest BV Bonds whose yields are in the double digits and predicts the bonds will continue to pay scheduled dividends and the discount to maturity justifies the risk, in a research note issued on Monday 03/31/14.
Metinvest B.V. reported consolidated earnings results for the full year ended December 31, 2013. For the period, the company reported revenues of US$12.8 billion, adjusted EBITDA of US$2.29 billion and capital expenditure of US$747 million against revenues of US$12.56 billion, adjusted EBITDA of US$1.99 billion and capital expenditure of US$765 million a year ago. Net debt as at December 31, 2013 was US$3.52 billion.
Laureate reports, the geopolitical turmoil over the annexation of the Crimean peninsula has
created an opportunity for trading around the conflict.
Standard and Poor’s Rating Services estimates that Ukraine must US$13 billion to service its foreign-currency debt this year. Ukraine’s international reserves fell to US$17.8 billion in January 2014 from US$20.4 billion in December 2013.
According to CEO Peter Tasca of Laureate,” the yields from Metinvest BV justifies the risk-return, if you look at total revenue vs. total debt, it is manageable.”
Laureate market research notes, there is sufficient evidence from the IMF, European Union and the United States that Ukraine will be bailed out with an aid package, thus avoiding any potential of bankruptcy.
German Foreign Minister Frank-Walter Steinmeier stated, Ukraine will receive international aid because a bankrupt country would be too risky for its Western and Eastern neighbors.
Tasca states, " we do not recommend investing in any Russian assets, due to reports that predict that between US$50-US$70 billion could flow out of the country this quarter alone. That will have a significant impact and create a real risk of recession that country.”
LNG Capital, a London-based credit hedge fund has started buying one-year Ukrainian sovereign debt and betting against the five-year maturity, said Chief Investment Officer Louis Gargour.
According to Tasca of Laureate BVI which has returned 23% in net profits for 2013, “because of low saving rates offered by banks, even to preserve one’s wealth, we need to look at calculated opportunities. At Laureate, we identify which risks are worth taking and which ones are worth avoiding.”
About Laureate Trust
Laureate Trust is a leading financial services company with a proud reputation for adapting to marketplace trends and delivering results to clients worldwide. The proven advisory teams combine product and sector expertise with access to global capital to offer exceptional results in any market environment. In 2013 this multiple platform strategy returned +23.01% net of all fees.
In 2014 Laureate launched a Referral Fee Programme that will pay 2% commission of the initial deposit and then a management fee for the life of the account. “We want our partners to benefit from every bit of success they help us generate” said Tasca.
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