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Fundamental View
AS OF 19 Dec 2025Macquarie was tested during the global financial crisis, but managed to steer through the crisis without reporting losses. A strong balance sheet mitigated liquidity problems, but its banking unit had to turn to Australia’s central bank at that time for support.
The group has an impressive track record of managing risks and achieving good returns, and has built capabilities in a number of areas. Divestments are controlled based on market conditions. It was a beneficiary of market volatility in the commodity space in FY23-24. Its Australian mortgage book has also shown strong but sensible growth.
Business Description
AS OF 19 Dec 2025- Macquarie grew out of the Australian business of Hill Samuel, which commenced operations in 1969. Macquarie Group Ltd (MGL) is the holding company and listed entity, under which there is the banking group Macquarie Bank Ltd (MBL) which consists of the Banking & Financial Services (BFS) and Commodities & Global Markets (CGM) businesses, and a non-banking group which consists of the Macquarie Asset Management (MAM) and Macquarie Capital (MC) businesses.
- From the 1990s, the group has been associated with the "Macquarie Model" which focused on identifying cash-generating infrastructure assets & packaging them into funds that could be sold, with Macquarie taking fees as banker, arranger and asset manager.
- It acquired asset managers including Delaware Investments in the US and Blackmont Capital in Canada, boutique investment bank Fox-Pitt Kelton and specialists such as Tristone Energy (Canada). It acquired US asset manager, Waddell & Reed in April 2021, which added around US$76 bn of assets under management. It has recently sold its public AM business in the US and Europe to Nomura. Adjusting for the Nomura transaction, MAM has AUM of A$720 bn.
Risk & Catalysts
AS OF 19 Dec 2025Macquarie Group has sizable exposure to credit and equity risk, and so could be adversely impacted by falls in asset prices. In addition, volatile/weak markets could and has impeded its ability to exit some of its investments.
Its earnings profile partially depends on exits and therefore is lumpy in nature. It has till recently managed this risk well, but we are now cautious about its declining group capital surplus (it does not commit to a minimum level).
It is a global leader in infra investments and is well positioned for the green transition (though recently selling down these assets has proved difficult). It has been a strong beneficiary of volatility in commodity markets, a testament to its risk management capabilities.
Its banking unit was subject to enforcement action in Apr-21 by APRA over the incorrect treatment of intra-group funding arrangements resulting in an A$500 mn operational risk overlay as well as LCR and NSFR add-ons. The CGM unit also saw higher regulatory remediation-related spend more recently.
Key Metric
AS OF 19 Dec 2025| AUD mn | FY23 | FY24 | FY25 | 1H26 |
|---|---|---|---|---|
| Operating Income | 19,576 | 17,071 | 17,569 | 8,720 |
| Cost/Income | 62.0% | 71.4% | 70.5% | 71.8% |
| Net Profit | 5,182 | 3,522 | 3,715 | 1,655 |
| Return on Equity | 16.9% | 10.8% | 11.2% | 9.6% |
| Total Impairments/Op Profit | 6.1% | (7.4%) | 6.6% | 1.2% |
| Annuity Business Profit Contribution | 34.2% | 36.5% | 43.6% | 51.9% |
| MBL CET1 Ratio (APRA) | 13.7% | 13.6% | 12.8% | 12.4% |
| MBL Liquidity Coverage Ratio | 214% | 191% | 175% | 173% |
| MBL Net Stable Funding Ratio | 124% | 115% | 113% | 113% |
CreditSight View Comment
AS OF 11 Feb 2026Macquarie has a strong record of profitability since its inception. Its AM business focused on infrastructure, including green assets, is a global leader. It manages risks and returns effectively, and in FY22+23 was a large beneficiary of O&G and power price volatility. The Aus banking business has steadily gained mortgage marketshare. Large investment disposals from AM and Macquarie Capital led to a record year in FY22; strong commodities outperformance led to another record in FY23. FY24 income was affected by asset realisations and gas & power income. FY25 was helped by asset sales, 1H26 was just 3% up YoY but 3Q was better. Group capital surplus is falling but is comfortable at the bank level. ALM is conservative. Senior spreads at both bank and group are tight.
Recommendation Reviewed: February 11, 2026
Recommendation Changed: February 11, 2026
Featured Issuers
Perusahaan Listrik Negara
Hyundai Motor
Republic of the Philippines
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Search topics about wealth insights and investments.Perusahaan Listrik Negara
- Sector: Energy
- Sub Sector: Independent Power Producers
- Region: Indonesia
- Bond: PLNIJ 4.125 27
- Indicative Yield-to-Maturity (YTM): 4.29%
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Fundamental View
AS OF 17 Dec 2025- PLN enjoys extremely strong ties with the Government of Indonesia (GoI) given its critical policy role of electrifying the nation. Post the launch of Indonesia’s sovereign wealth fund Danantara, PLN is now indirectly owned by the GoI through Danantara.
- PLN delivered a robust set of 1H25 results, with total revenue and EBITDA up 5% and 9% YoY respectively driven by resilient power demand across Indonesia
- Looking ahead, we expect PLN’s credit metrics to improve in FY25 supported by higher YoY EBITDA, though partially weighed upon by higher capex; we anticipate FY25 EBITDA growth to be in the mid to high single-digit % YoY, mainly attributable to Indonesia’s healthy economic growth, supporting power demand; we also expect power tariffs to remain flat.
Business Description
AS OF 17 Dec 2025- PLN is involved in the entire electricity value-chain, from power generation, to transmission, distribution and retail.
- It alone accounts for 76% (~47 GW) of Indonesia's generation capacity (of which 8 GW is renewable capacity), while IPPs provide the remainder.
- The company controls and operates the entire transmission and distribution network in the country. It is the sole buyer of electricity produced by IPPs, through power purchase agreements (PPAs).
- It sells electricity to well-diversified off-takers – 41% to households, 25% to industrial customers, 21% to businesses and 12% to others.
- Since 2015, the GoI has gradually implemented monthly tariff adjustments for 13 customer groups, so that rates charged to customers are better matched with production costs.
- However, under the Public Service Obligation (PSO), the company will continue to sell electricity at subsidized rates of 50% to 450-volt amperes (VA) power households and 25% to 900 VA power households. The GoI subsequently reimburses the company for the difference between the subsidized tariff rate and production cost, typically within 2-3 months.
Risk & Catalysts
AS OF 17 Dec 2025- The company provides subsidized electricity to certain households for which it subsequently receives reimbursements from the GoI; though these payments tend to get delayed during major events such as COVID-19 pandemic.
- In order to increase the country’s electrification ratio to 97%, the company had been mandated by the GoI to develop large electricity capacities through the Fast Track II and 35,000 MW Programs. Implementation of such complex programs has required significant capital expenditure, which has led PLN’s FCF to fall deep into the red in recent years and created a funding gap.
- The success of the above programs is also contingent on the company’s ability to source coal cheaply, select quality contractors, acquire land rights and receive adequate subsidy reimbursements from the GoI.
- Being primarily a thermal power producer, PLN may be viewed unfavourably from an ESG perspective.
Key Metric
AS OF 17 Dec 2025| IDR bn | FY22 | FY23 | FY24 | 1H24 | 1H25 |
|---|---|---|---|---|---|
| Debt to Book Cap | 28.9% | 27.8% | 27.3% | 27.5% | 27.2% |
| Net Debt to Book Cap | 25.2% | 23.7% | 23.0% | 25.4% | 23.9% |
| Debt/Total Equity | 40.7% | 38.5% | 37.5% | 38.0% | 37.3% |
| Debt/Total Assets | 24.6% | 23.4% | 22.5% | 22.9% | 22.1% |
| Gross Leverage | 4.1x | 4.1x | 3.6x | 4.1x | 3.4x |
| Net Leverage | 3.5x | 3.5x | 3.0x | 3.8x | 3.0x |
| Interest Coverage | 4.5x | 3.7x | 3.9x | 3.4x | 3.9x |
| EBITDA Margin | 31.2% | 27.6% | 30.4% | 29.8% | 30.9% |
CreditSights View
AS OF 27 Jan 2026PLN (Perusahaan Listrik Negara) is a resilient, quasi-sovereign utility, making it a core defensive recommendation primarily due to its monopolistic dominance and critical role in powering Indonesia’s economy. The company’s credit strength is built on foundational operations across the entire electricity value chain—generation, transmission, and distribution—providing predictable cash flows and protection through established government subsidy mechanisms. Complementing this stability is its strategic alignment with national development goals, now reinforced by its indirect ownership under the sovereign wealth fund, Danantara, which supports its capital-intensive transition toward renewable energy and the ambitious 2034 power supply plan. This deep integration with the state not only mitigates execution risks associated with its elevated capital expenditures but also ensures robust financial backing, allowing PLN to sustain healthy credit metrics—recently improving net leverage to 3.0x—positioning it to benefit substantially from Indonesia’s resilient power demand and long-term economic expansion.
Recommendation Reviewed: January 27, 2026
Recommendation Changed: December 06, 2024
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Perusahaan Listrik Negara
Hyundai Motor
Republic of the Philippines
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Fundamental View
AS OF 09 Dec 2025Petron’s delivered a robust set of result in 9M25; we expect Petron’s credit metrics to improve YoY, driven by improvement in its EBITDA and lower debt. We expect FY25 EBITDA to improve YoY owing to double-digit YoY-decline in crude oil input costs in FY25, though partially offset by a single-digit YoY decline in sales volume.
About two-third of its total revenues are derived from the Philippines and are indexed to Dubai crude prices, which allows for smooth cost pass-throughs and good insulation from crude price volatility.
Free cash flows are typically negative due to inventory fluctuations that outweigh low capex.
Business Description
AS OF 09 Dec 2025- Petron is the largest oil refining and retailing company in the Philippines, and the third largest player in Malaysia. It maintains a 24% market share in the Philippines (followed by Shell and Caltex) and a 20% market share in Malaysia (largest being Petronas), based on total fuel sales volumes.
- Petron has a total refining capacity of 268k barrels/day (bpd) and accounts for about 30% of the Philippines' fuel needs. Its petroleum refining facilities include the Limay Refinery in Bataan, Philippines (capacity of 180k bpd; 67% of total) and the Port Dickson Refinery in Negeri Sembilan, Malaysia (capacity of 88k bpd; remaining 33% of total).
- Petron's refineries process crude oil into a full range of petroleum products including gasoline, diesel, LPG, jet fuel, kerosene and petrochemicals.
- It further markets and retails these fuel products through its fuel service stations located across the Philippines (~1,800 outlets) and Malaysia (>800 outlets).
- Petron sources its crude oil supplies from third-party suppliers, namely Saudi Aramco, Kuwait Petroleum Corporation and Exxon Mobil, which are bought on the basis of term contracts and in the spot market.
- Petron mainly supplies its petroleum and fuel products to customers in Malaysia and the Philippines (~95% of annual revenue).
- Petron is 68% owned by San Miguel Corporation (SMC), one of the largest and most diversified conglomerates in the Philippines based on total revenues and assets. SMC's CEO, Mr. Ramon Ang, is also Petron's CEO.
Risk & Catalysts
AS OF 09 Dec 2025Petron cannot fully pass on higher crude oil input costs to customers in Malaysia.
Petron operates in low-margin business (EBITDA margins ~5%) and maintains elevated credit metrics.
Petron is highly dependent on its Limay petroleum refining complex that makes up two-thirds of its total refining capacity (67%). Any events that disrupt the refinery’s operations could adversely affect Petron’s total revenues.
Key Metric
AS OF 09 Dec 2025| PHP bn | FY22 | FY23 | FY24 | 3Q24 | 3Q25 |
|---|---|---|---|---|---|
| Debt to Book Cap | 74.0% | 75.1% | 74.5% | 70.8% | 71.0% |
| Net Debt to Book Cap | 65.5% | 68.2% | 67.1% | 59.7% | 60.7% |
| Debt/Total Equity | 284.2% | 301.4% | 292.0% | 242.0% | 245.0% |
| Debt/Total Assets | 70.2% | 67.6% | 64.9% | 63.6% | 61.9% |
| Gross Leverage | 10.9x | 7.1x | 7.4x | 7.9x | 6.0x |
| Net Leverage | 9.7x | 6.4x | 6.7x | 6.7x | 5.1x |
| Interest Coverage | 2.2x | 2.2x | 1.9x | 1.8x | 2.4x |
| EBITDA Margin | 3.4% | 5.3% | 4.7% | 3.8% | 7.1% |
CreditSight View Comment
AS OF 30 Mar 2026We continue to like Petron’s c.2028 for its relatively high coupon and high carry. Overall, we think Petron is a stable credit with an improving credit outlook. We like its full cost passthroughs for its operations in retail O&G in the Philippines, low capex, consistently improving net leverage metric, manageable debt maturity profile, proven willingness/ability to call back its perps by their first call date, and strong parental support from the domestically well-reputed San Miguel Group. A proposed sale to the Philippine government would be modestly credit positive too in our view. Key risks include exposure to fuel pricing regime changes, unexpected large debt-funded capex, and concentration risk in its two main Bataan and Port Dickson refineries.
Recommendation Reviewed: March 30, 2026
Recommendation Changed: March 10, 2026
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Perusahaan Listrik Negara
Hyundai Motor
Republic of the Philippines
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Search topics about wealth insights and investments.Tencent
- Sector: Technology Media and Telecommunications
- Sub Sector: Technology
- Country: China
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Fundamental View
AS OF 28 Nov 2025We maintain our O/P recommendation on Tencent. In 3Q25, revenues accelerated and were ahead of expectations, EBITDA margin expanded on an improved revenue mix, FOCF remained robust, debt metrics improved. We view Tencent as a core holding in China and Asia IG credits, and it is our preferred duration play. While valuations of Tencent is less compelling compared to YE24, its longer duration bonds still offer ~20 bp of spread pick up against Chinese SOEs of similar tenors. We like Tencent’s strong and improving credit outlook compared to its Chinese tech peers, rock solid balance sheet and robust free operating cash flow. We prefer its 2041 bond which offer the highest 20-35 bp spread pick up against Asia A corporate and Chinese SOEs
Business Description
AS OF 28 Nov 2025- Founded in November 1998, Tencent is a leading provider of Internet value added services in China. Since its establishment, Tencent has ventured into instant messaging, social networking, online payments, digital entertainment, and PC and smartphone gaming. Most recently, it has also forayed into high-tech areas such as artificial intelligence, and cloud computing.
- Tencent's leading Internet platforms in China include Weixin/WeChat (online messaging), QQ Instant Messenger (online messaging), Tencent Games (gaming), Tencent Video/Weixin Video Accounts (video platforms), WeChat Pay (payments), and Tencent Cloud. The combined monthly average users (MAU) of Weixin and Wechat reached 1.40 bn as of 31 March 2025.
- In 3Q25, 50% of revenues came from Value Added Services (which consist of Domestic Games, International Games, and Social Networks), 30% came from FinTech and Business Services (e.g. commercial payments and cloud), and 19% from Online Advertising.
- Tencent is currently primarily listed on the Hong Kong Stock Exchange, with a market capitalization of HKD 5.6 tn as of 27 November 2025.
Risk & Catalysts
AS OF 28 Nov 2025While Chinese regulators have adopted a more friendly stance towards tech companies, any regulatory clampdowns abroad and domestically (e.g. antitrust rules, data security, personal information protection laws) may affect Tencent’s business. Tencent’s gaming, music streaming, and online payment units are among those that have come under regulatory scrutiny in the past.
Tencent uses variable interest entities (VIEs) to circumvent China’s restrictions on foreign ownership of Internet Content Providers, which poses regulatory risks. Specifically, VIE transactions involving “change in control” will be subject to antitrust regulatory processes.
US-China tension may escalate under the new Trump Administration, including additional chip sanctions, which may result in higher volatility. Failing to secure a stable supply of advanced AI chips and/(or) find domestic alternatives could weigh on the long-term AI development of Tencent against international peers.
Key Metric
AS OF 28 Nov 2025| RMB bn | FY21 | FY22 | FY23 | FY24 | LTM 3Q25 |
|---|---|---|---|---|---|
| Debt to Book Cap | 27.0% | 31.4% | 29.8% | 25.4% | 24.5% |
| Net Debt to Book Cap | 6.0% | 8.5% | 1.0% | 2.3% | 1.4% |
| Debt/Total Equity | 36.9% | 45.9% | 42.5% | 34.0% | 32.5% |
| Debt/Total Assets | 20.1% | 22.8% | 23.5% | 20.1% | 19.7% |
| Gross Leverage | 1.7x | 1.9x | 1.6x | 1.3x | 1.2x |
| Net Leverage | 0.4x | 0.5x | 0.1x | 0.1x | 0.1x |
| Interest Coverage | 24.7x | 19.0x | 19.9x | 22.5x | 24.4x |
| EBITDA Margin | 34.9% | 34.3% | 38.9% | 42.4% | 45.0% |
CreditSight View Comment
AS OF 20 Mar 2026We maintain our O/P recommendation on Tencent post its in-line and strong 4Q25 results. Topline growth remained resillient thanks to its gaming and online ads segment; EBITDA margin improved YoY on a better revenue mix and cost efficiency for cloud; FOCF was robust and debt metrics stayed modest. We expect Tencent’s debt metrics to remain stable and modest over the next 12 months. In addition, we view Tencent as a core holding in Asia IG, and we think its good hedge against US AI and expect strong technical support from Chinese accounts in an event of spread widening. TENCNT is our preferred duration play, and the longer dated-bonds of the company offer an attractive 10-45 bp spread pick up against their Asia A corporate and China A-rated SOE peers. We prefer the TENCNT 2049 bond.
Recommendation Reviewed: March 20, 2026
Recommendation Changed: August 18, 2022
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Perusahaan Listrik Negara
Hyundai Motor
Republic of the Philippines
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Fundamental View
AS OF 27 Nov 2025Rural Electrification Corp Ltd (REC) is an important public sector enterprise as it is the government’s key strategic partner for driving reforms and developments in the power sector, and providing financing to weaker players (particularly distribution companies or “discoms”) to prevent liquidity disruptions to the sector, similar to its parent Power Finance Corp’s (PFC) mandate.
We view REC’s credit profile as underpinned by strong state support due to its majority 52.63% ownership by PFC, which is in turn 55.99% owned by the government of India (GoI), as well as the key role that it plays in an essential sector of the country.
REC is rated in line with both its parent, PFC, and the Indian sovereign at the international credit rating agencies.
Business Description
AS OF 27 Nov 2025- Established in 1969, Rural Electrification Corp Ltd (REC) is an important public sector enterprise of the Government of India (GoI) due to its mandate of helping to support the country's power sector initiatives. It has been designated as a systematically important NBFC by the Reserve Bank of India (RBI).
- REC went public on the Indian stock exchanges in 2008 but continued to be majority owned by the GoI until March 2019, where the GoI sold its 52.63% shareholding in REC to Power Finance Corp (PFC) for INR 145 bn as part of the GoI's efforts to monetise its shareholding in different public sector enterprises; PFC is in turn 56% owned by the GoI. REC’s non-PFC shareholding is broadly similar to that of its parent, with a 20% share of foreign portfolio investors, 12% individuals, 9% mutual funds, and 6% others.
- REC has continued to be run as a standalone institution despite PFC's majority ownership in the entity.
- Similar to its parent, REC primarily provides funding to the public sector (~86% of its loan book) while the private sector is ~14%. By segment, Transmission & Distribution (T&D) is the largest part of the loan asset mix at 49%, followed by conventional and renewable energy generation at 27% and 12% respectively, while Infrastructure (10%) and Others (3%) round up the rest.
Risk & Catalysts
AS OF 27 Nov 2025Given its mandate, REC has concentrated loan exposure to the power sector which is also chunky in nature; power generation projects typically involve large upfront borrowing and have long gestation periods before the projects become operational. Resolutions of stressed exposures have been with delays due to India’s slow moving Insolvency & Bankruptcy Code (IBC) regime despite the ongoing NCLT reforms, but are gaining traction. Earlier lumpy provisioning and now meaningful reversals are the result.
Asset quality risk is also mitigated by a majority public sector exposure; while many state government discoms are in poor health, REC can get funds meant for the states through the GoI/RBI if payments are overdue.
Like most NBFCs, REC is reliant on the confidence sensitive wholesale market for funding. However, its quasi-government status enables it to have diversified funding sources (onshore and offshore) at costs that are close to the sovereign.
Key Metric
AS OF 27 Nov 2025| INR mn | FY22 | FY23 | FY24 | FY25 | 1H26 |
|---|---|---|---|---|---|
| NIM | 4.07% | 3.38% | 3.57% | 3.63% | 3.64% |
| PPP ROAA | 3.91% | 3.17% | 3.24% | 3.60% | 3.42% |
| ROAA | 2.47% | 2.53% | 2.77% | 2.71% | 2.83% |
| ROE (Reported) | 21.3% | 20.4% | 22.2% | 21.5% | 22.1% |
| Total Equity/Total Assets | 12.42% | 12.41% | 12.56% | 12.65% | 12.94% |
| Tier 1 Ratio | 19.6% | 22.8% | 23.3% | 23.8% | 21.7% |
| Total Capital Ratio | 23.6% | 25.8% | 25.8% | 26.0% | 23.7% |
| Gross NPA Ratio | 4.45% | 3.42% | 2.71% | 1.35% | 1.06% |
| Provisions/Avg Loans | 0.91% | 0.03% | (0.29%) | 0.19% | (0.17%) |
CreditSight View Comment
AS OF 09 Feb 2026REC is 52.63% owned by PFC and along with its parent is one of two policy NBFIs that provides funding for power generation and T&D projects, lending largely to state government utilities (86% of loans) vs. the private sector (14%). Operating performance was on an uptrend in recent years, supported by a material improvement in asset quality and resolution of past stressed assets. Margin expansion since FY23 and robust loan growth also supported a strong topline. Growth momentum however is slowing on higher pre-payments and margins have steadied. The CAR ratio is ~24%. Although a number of state government utilities are in poor health, the NBFIs can get funds meant for the states through the GoI/RBI if they don’t get paid in time.
Recommendation Reviewed: February 09, 2026
Recommendation Changed: May 22, 2025
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Perusahaan Listrik Negara
Hyundai Motor
Republic of the Philippines
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Search topics about wealth insights and investments.T-Mobile US
- Sector: Technology Media and Telecommunications
- Sub Sector: Telecommunications
- Region: US
- Bond: TMUS 3.5 31
- Indicative Yield-to-Maturity (YTM): 4.275%
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Fundamental View
AS OF 24 Nov 2025We expect T-Mobile will maintain its position as the industry leader in postpaid phone net additions, service revenue and EBITDA growth in 2025. We think the company has significant subscriber runway remaining in the suburban/rural and enterprise markets.
Adjusted net leverage (2.5x at 3Q25) is below AT&T/Verizon. Relatively strong EBITDA growth and a modest dividend commitment results in greater financial flexibility than peers.
T-Mobile benefits from the strongest spectrum position in the industry, including an average of 181 MHz in the 2.5 GHz band, which results in better 5G network coverage than AT&T and Verizon.
Business Description
AS OF 24 Nov 2025- TMUS is the one of the top 3 U.S. wireless carriers and is owned ~51% by Deutsche Telekom (DT). On April 1, 2020, TMUS and S completed an all-stock merger, valuing S at an EV of approximately $59.7 bn.
- TMUS ended 2024 with ~130 mn customers, including 104 mn postpaid and 25 mn prepaid.
- TMUS reaches 330+mn POPs with its Extended Range 5G network (using the 600 MHz spectrum) and reaches 300mn customers with its Ultra Capacity 5G.
Risk & Catalysts
AS OF 24 Nov 2025Converged wireless/broadband offers from cable operators raises the risk of pricing pressure in the mature consumer wireless market. AT&T and Verizon have also made sizable fiber acquisitions, enhancing their ability to offer converged services.
The company has not shied away from acquisitions. T-Mobile recently acquired Mint Mobile, two FTTH JVs and US Cellular. So far, M&A has not had much impact on T-Mobile’s credit metrics, but further moves into FTTH may be received poorly by investors.
Key Metric
AS OF 24 Nov 2025| $ mn | FY21 | FY22 | FY23 | FY24 | LTM 3Q25 |
|---|---|---|---|---|---|
| Revenue | 80,118 | 79,571 | 78,558 | 81,400 | 85,847 |
| Organic Revenue Growth | 7.3% | (0.7%) | (1.3%) | 3.6% | 7.3% |
| EBITDA | 26,924 | 27,821 | 29,428 | 31,864 | 33,406 |
| Adj. EBITDA Growth | (64.0%) | 33.9% | 5.8% | 8.3% | 7.2% |
| Adj. EBITDA Margin | 33.6% | 35.0% | 37.5% | 39.1% | 38.9% |
| CapEx % of Sales | 15.4% | 17.6% | 12.5% | 10.9% | 11.3% |
| Total Debt | 79,574 | 78,425 | 83,586 | 84,255 | 90,107 |
| Net Debt | 72,943 | 73,918 | 78,451 | 78,846 | 86,797 |
| Gross Leverage | 3.4x | 3.0x | 2.9x | 2.7x | 2.7x |
| Net Leverage | 3.0x | 2.7x | 2.6x | 2.4x | 2.5x |
| Interest Coverage | 7.2x | 8.0x | 8.3x | 8.7x | 8.7x |
| FCF as % of Debt | 13.7% | 13.2% | 19.2% | 23.0% | 22.1% |
CreditSight View Comment
AS OF 01 Apr 2026We expect T-Mobile will continue to lead the industry for growth in subscribers and EBITDA (+10% YoY) in 2026 and beyond. T-Mobile also boasts the lowest leverage (~2.4x) and strongest FCF/debt ratio amongst the Wireless Big 3, while its rising FCF generation and comparatively low dividend commitment provide flexibility for selective M&A. We acknowledge that event risk for TMUS is higher than peers AT&T and Verizon, which have already announced material FTTH and spectrum acquisitions. However, despite the rising focus on convergence, we believe TMUS will stick with its off-balance sheet strategy for FTTH JVs and view the risk of a transformational broadband acquisition (ILEC or cable) as low.
Recommendation Reviewed: April 01, 2026
Recommendation Changed: March 18, 2021
Featured Issuers
Perusahaan Listrik Negara
Hyundai Motor
Republic of the Philippines
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Fundamental View
AS OF 12 Nov 2025Historically, KDP has benefited from exposure to faster growing, higher margin beverage & coffee categories. However, the credit story is current dominated by the pending acquisition of JDE Peet’s, and plans to separate the coffee and beverage businesses.
Pro forma for the initial merger, KDP will have net leverage of 4.6x (vs 3.3x at MRQ), with plans to delever thereafter. Management expects both standalone entities to maintain investment grade ratings, but leverage will likely be elevated out of the gate.
KDP has a successful track record of deleveraging after past M&A. We like the growth outlooks of the proposed standalone entities, and think the new issue to fund the acquisition will likely present a good opportunity to add exposure to the name.
Business Description
AS OF 12 Nov 2025- KDP is the result of a July 2018 merger between Dr Pepper Snapple and Keurig Green Mountain. The merger combined a traditional soft drinks company (DPS) with a faster growing coffee platform that includes the market's leading single serve brewing system.
- The merger was backed by JAB Holdings via its affiliate, Maple Holdings BV. While JAB has trimmed its stake in recent periods, it still controls ~16% of the shares.
- KDP recorded $15.4 bn in 2024 net sales with adjusted EBITDA of $4.5 bn. The business is heavily concentrated in North America, and results are reported across three operating segments: U.S. Refreshment Beverages (61% of 2024 sales), U.S. Coffee (26% of sales), and International (13.0% of sales).
- Examples of KDP's key brands include Dr Pepper, Keurig, Snapple, Canada Dry, 7Up, Mott's, and A&W. The company also partners with other leading coffee brands from various producers via licensing and manufacturing agreements for K-cups.
- KDP signed a definitive agreement to acquire JDE Peet's for $22+ bn in August. The deal is expected to close in 1H26. Subsequently the company intends to separate the business into two standalone entities: Global Coffee Co and Beverage Co.
Risk & Catalysts
AS OF 12 Nov 2025The KDP-JDEP acquisition ($22 bn) is anticipated to close in 1H26, with the goal of being separation ready by year-end 2026. Management reiterated its $400 mn synergy target over three years.
The coffee industry is currently experiencing intense cost inflation, and price elasticity has increased, challenging cost passthrough.
Post-split, BeverageCo will target 3.5-4.0x net leverage and Global CoffeeCo will target 3.75-4.25x net leverage. There is still uncertainty where legacy bonds will end up, but we tend to see BeverageCo ending up as RemainCo. It is also unclear what pf net leverage will be at the standalone entities. If BeverageCo is RemainCo, we expect some level of debt repayment following a spin/sale of Global CoffeeCo.
Key Metric
AS OF 12 Nov 2025| $ mn | Y21 | Y22 | Y23 | Y24 | LTM 3Q25 |
|---|---|---|---|---|---|
| Revenue | 12,683 | 14,057 | 14,814 | 15,351 | 16,174 |
| EBITDA | 3,908 | 3,932 | 4,189 | 4,528 | 4,678 |
| EBITDA Margin | 30.8% | 28.0% | 28.3% | 29.5% | 28.9% |
| EBITDA-CAPEX-INT % of Revenues | 23.5% | 20.5% | 21.7% | 21.6% | 21.7% |
| Total Debt | 12,024 | 12,104 | 13,308 | 15,595 | 15,846 |
| Net Debt | 11,457 | 11,569 | 13,041 | 15,085 | 15,330 |
| Net Leverage | 2.9x | 2.9x | 3.1x | 3.3x | 3.3x |
| EV / EBITDA | 16.3x | 15.8x | 14.2x | 13.0x | 10.7x |
CreditSight View Comment
AS OF 12 Mar 2026We see value in KDP spreads relative to mid-BBB beverage peer Constellation Brands, and relative to tighter trading names like General Mills and Mondelez, even as the company contemplates the leveraging acquisition of JDE Peet’s and a subsequent split of its coffee and beverage businesses. PF net leverage is expected to be 4.5x out of the gate and management will target investment grade levels are both entities after the eventual spin. Financing will include $9.0 bn of private equity funds, which was designed to replace debt financing and aid in deleveraging. We are comfortable with the anticipated credit profiles of the two supposed standalone entities, and favor the beverage and coffee margin and cash flow profiles to those of food peers.
Recommendation Reviewed: March 12, 2026
Recommendation Changed: January 16, 2026
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Fundamental View
AS OF 10 Nov 2025As one of the world’s largest beverage companies KO operates across a diverse geographic footprint and generates stable and robust free cash flow.
KO’s net leverage is in a conservative position despite a recent increase in debt, at the low-end of management’s 2.0-2.5x range.
In light of recent increase price elasticity in food categories, we favor KO’s pure-play beverage portfolio to mixed food and beverage portfolio at PepsiCo.
Business Description
AS OF 10 Nov 2025- KO is the world's largest beverage company, owning, licensing, and marketing numerous brands in over 200 countries worldwide. It has 4 of the world's top 5 nonalcoholic sparkling beverage brands: Coca-Cola, Diet Coke, Fanta and Sprite.
- KO distributes its product through independent and company-controlled bottling distribution operations. KO largely refranchised its wholly-owned bottlers, selling the operations to independent bottlers. This strategy reduced capital intensity and expanded margins.
- KO has two primary businesses: Beverage Concentrates (66% of revenue) and Finished Sparkling & Still Beverages (34% of revenue). KO uses unit case volume growth and concentrate sales volume to evaluate performance.
- In 2024, the Coca-Cola system sold 33.7 bn unit cases of products worldwide, comprised of 69% from sparkling beverages and 47% from trademark Coca-Cola. The system has broad international exposure, with 84% of unit case volume generated outside the U.S.
Risk & Catalysts
AS OF 10 Nov 2025An unfavorable U.S. tax ruling could still result in some leverage creep depending on the ultimate outcome. KO is appealing the ruling, and in the meantime, management’s has steered leverage towards or below the low-end of its 2-2.5x range.
Management has expressed interest in expanding its presence over time in the alcoholic beverage category, although to this point the company has limited its involvement to licensing arrangements for its soft drink brands with large-scale brewers and distillers.
Sugar-based drinks have frequently been the target of RFK Jr’s MAHA movement, introducing risk of SNAP eligibility loss, which could create demand headwinds.
Key Metric
AS OF 10 Nov 2025| $ mn | Y21 | Y22 | Y23 | Y24 | LTM 3Q25 |
|---|---|---|---|---|---|
| Revenue | 38,658 | 43,046 | 45,784 | 46,897 | 47,475 |
| EBITDA | 12,898 | 13,961 | 14,719 | 15,446 | 16,122 |
| EBITDA Margin | 33.4% | 32.4% | 32.1% | 32.9% | 34.0% |
| EBITDA-CAPEX-INT % of Revenues | 27.9% | 26.9% | 24.8% | 25.0% | 26.2% |
| Total Debt | 42,761 | 39,149 | 42,064 | 44,522 | 47,416 |
| Net Debt | 31,835 | 28,587 | 29,701 | 31,674 | 33,542 |
| Net Leverage | 2.5x | 2.0x | 2.0x | 2.1x | 2.1x |
| EV / EBITDA | 22.4x | 21.8x | 19.4x | 19.5x | 19.8x |
CreditSight View Comment
AS OF 18 Feb 2026We have an Outperform recommendation on KO bonds, reflecting a slight preference for the credit over its high-A beverage peer, PepsiCo, at similar levels. We view both credits as core holds, but our updated view reflects increased comfort with KO’s ability to navigate an expected tax liabilities related to U.S. Tax Court litigation, as well as recent earnout payments related to the Fairlife acquisition. KO has reported steady organic growth led by continued pricing benefits and stable consumption trends across its portfolio of soft drinks. Management guides to a net leverage target of 2-2.5x and we expect the company to maintain metrics in that range over the medium term. Playing KO vs PEP also allows investors to avoid activist risk and exposure to the snacking category at PEP.
Recommendation Reviewed: February 18, 2026
Recommendation Changed: January 16, 2025
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Search topics about wealth insights and investments.Netflix Inc
- Sector: Media
- Sub Sector: Technology
- Region: US
- Bond: NFLX 4.875 30
- Indicative Yield-to-Maturity (YTM): 4.30%
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Fundamental View
AS OF 28 Oct 2025- Netflix is one of the few clear winners in the industry’s transition to streaming, and we believe the group’s leading position will be bolstered in 2025/2026 as legacy media companies continue to rein in spending and international ambitions.
- From a financial perspective, we expect Netflix will deliver ~25% EBITDA growth in 2025 driven by a mix of subscriber growth, price hikes and margin expansion.
- Netflix’s financial policy is relatively conservative. While the company no longer targets $10-15 billion of gross debt, we view Netflix’s new financial policy as an evolution rather than a revolution and expect credit metrics to remain best in class.
Business Description
AS OF 28 Oct 2025- NFLX is the world's leading subscription streaming entertainment service with ~300+ mn paid streaming subs in 190+ countries around the world. NFLX's programming includes original & acquired TV series, documentaries and feature films.
- NFLX began expanding internationally with the launch of services in Canada (Sep 2010), followed by LatAm (Sep 2011), and the UK and Ireland (Jan 2012). NFLX launched services in 17 more markets at a measured pace through the end of 2015 before launching in the rest of the world in Jan 2016 (ex-China, N Korea, Syria, Crimea).
- As of FY24, Netflix's regional subscriber breakdown was as follows: (1) EMEA - 101.1 mn; (2) UCAN - 89.6 mn; (3) APAC - 57.5 mn and (4) LATAM - 53.3 mn.
- Ted Sarandos and Greg Peters are Co-CEOs, with Mr. Sarandos appointed to the position in July 2020 and Mr. Peters in January 2023. Co-founder Reed Hastings was appointed as executive chairman of the Board in January 2023.
Risk & Catalysts
AS OF 28 Oct 2025- M&A Risk: Warner Bros. Discovery is actively considering asset sales. We believe Netflix has no interest in linear TV assets, but could be open to a studio purchase under the right circumstances. Additionally, Netflix is in the early stages of an expansion into video games and has already acquired several studios.
- Increased Competition: Several large competitors including Amazon and Apple are increasingly leaning into DTC video offerings on a global basis. Heightened competition may result in rising churn & declining gross additions for NFLX.
- Market Saturation: Netflix is highly penetrated in the US market, so future growth will become increasingly dependent on price increases, uptake of the ad tier and success on the password sharing crackdown. The recent WWE and NFL deals also opens the door to higher-priced sports programming.
Key Metric
AS OF 28 Oct 2025| $ mn | FY21 | FY22 | FY23 | FY24 | LTM 3Q25 |
|---|---|---|---|---|---|
| Revenue | 29,698 | 31,616 | 33,723 | 39,001 | 43,379 |
| Revenue YoY % | 18.8% | 6.5% | 6.7% | 15.6% | 15.4% |
| EBITDA | 6,806 | 6,695 | 7,650 | 11,019 | 13,265 |
| EBITDA Growth | 33% | (2%) | 14% | 44% | 29% |
| Cash Content Expense | 17,469 | 16,660 | 13,140 | 17,003 | 17,209 |
| CFO - CapEx | (132) | 1,619 | 6,926 | 6,922 | 8,967 |
| Dividends/CFO-Capex | 0.0% | 0.0% | 0.0% | 0.0% | 0.0% |
| LTM CFO-CapEx to Debt | (0.9%) | 11.3% | 47.6% | 44.4% | 62.0% |
CreditSight View Comment
AS OF 27 Feb 2026Netflix is one of the few clear winners in the industry’s transition to streaming, and we believe the group is well positioned to maintain its double-digit top line and profit growth in 2026. Netflix surprised us in early December 2025 with the announcement of an $83 billion deal to acquire Warner Bros. Although the deal marked a major change in strategy, we viewed the transaction as strategically sound and were pleased to see the company walk away after Paramount raised the price to a level that was “no longer financially attractive”. We think that Netflix may kick the tires on a similar transaction with NBCUniversal, although it is unclear if they are comfortable owning a broadcast network or if Brian Roberts is willing to sell.
Recommendation Reviewed: February 27, 2026
Recommendation Changed: December 04, 2025
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Search topics about wealth insights and investments.Alibaba
- Sector: Technology Media and Telecommunications
- Sub Sector: Technology
- Country: China
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Fundamental View
AS OF 15 Sep 2025We maintain our O/P recommendation on BABA post its decent F1Q26 results; topline growth missed expectations, EBITDA margin fell 1 ppt, and FOCF turned negative; that said, gross leverage remained modest, with a strong net cash position intact. We view BABA as a core holding in China/Asia IG credits, and it is our preferred duration play. Its longer duration bonds trade ~40 bp wider than Chinese SOEs of similar tenors. In particular, we like BABA 2035. Within China tech credits, we prefer BABA over BIDU/JD, which are rated 1-2 notches lower but trade only marginally wider. We also view BABA to be more defensive compared to high beta BBB China tech credits while offering value.
Business Description
AS OF 15 Sep 2025- Founded in 1999, Alibaba is the largest retail commerce company in the world based on gross merchandise volume (GMV) as of 31 March 2023.
- The company's business segments comprise Taobao & Tmall Group (39% of F4Q25 revenue; China e-commerce incl. Taobao, Tmall, Taobao Deals, Taocaicai, 1688.com), International Digital Commerce (13%; incl. Lazada, AliExpress, Trendyol and Daraz), Cloud Intelligence Group (11%; incl. AliCloud, AI), logistic provider Cainiao (8%), Local Consumer Services (6%; incl. Ele.me, Amap), and Digital Media and Entertainment (2%, incl. Youku & Alibaba Pictures) and Others (21%; incl. Freshippo, Fliggy, Alibaba Health, Intelligent Information Platform, SunArt, DingTalk).
- Taobao/Tmall is Alibaba's core business and the main EBITA & cash generation unit of the group. Alibaba's annual active consumer exceeded 1 bn in June-2022.
- Alibaba had a market capitalization of RMB 2.7 tn as of 15 September 2025.
Risk & Catalysts
AS OF 15 Sep 2025While Chinese policymakers have adopted an increasingly friendly stance towards tech platforms, regulatory clampdown (e.g. anti-monopoly guidelines, data security laws, personal information protection laws) may still affect Alibaba as it increases compliance cost. There are regulatory risks given the corporate structure which uses variable interest entities (VIEs) to circumvent China’s restrictions on foreign ownership of Internet Content Providers (ICPs).
Intensifying competition amongst eCommerce platforms may result in slower topline growth and weaker EBITDA margins.
Alibaba does not control Alipay but relies on Alipay to conduct substantially all the payment processing and escrow services on its marketplaces.
US-China tension may escalate under the new Trump Administration, including additional chip sanctions, which may result in higher volatility. Failing to secure a stable supply of advanced AI chips and/(or) find domestic alternatives could weigh on the long-term AI development of Alibaba against international peers.
Key Metric
AS OF 15 Sep 2025| CNY BN | FY22 | FY23 | FY24 | FY25 | LTM F1Q26 |
|---|---|---|---|---|---|
| Debt to Book Cap | 11.6% | 12.6% | 13.3% | 17.5% | 17.5% |
| Debt/Total Equity | 13.1% | 14.4% | 15.3% | 21.2% | 21.2% |
| Debt/Total Assets | 8.3% | 9.2% | 9.7% | 12.8% | 12.6% |
| Gross Leverage | 0.9x | 0.9x | 0.9x | 1.2x | 1.2x |
| Interest Coverage | 32.2x | 29.6x | 24.0x | 20.7x | 19.9x |
| EBITDA Margin | 18.5% | 20.2% | 20.3% | 19.9% | 19.6% |
CreditSight View Comment
AS OF 20 Mar 2026We maintain our O/P recc on BABA. Topline growth due to a slowdown in eCommerce; EBITDA margin narrowed YoY; FOCF turned positive after two negative quarters; debt metrics marginally weakened, and BABA maintained a stable net cash position. We view BABA as a defensive core holding in Asia/China IG $ credits, and we like the healthy balance sheet and deep net cash of the company. We expect BABA’s debt metrics to improve over the next 12 months. In addition, we view BABA as a good hedge against US AI and expect strong technical support from Chinese accounts in an event of spread widening. Alibaba is our preferred duration play in Asia IG, and the longer dated-bonds of BABA offer an attractive 20-45 bp spread pick up against their Asia A corp & China A-rated SOE peers. We prefer BABA 2054.
Recommendation Reviewed: March 20, 2026
Recommendation Changed: August 05, 2022
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