Halister News

(Bloomberg) -- Walgreens agrees to pay Rite Aid a termination fee $325m.

• Rite Aid to sell 2,186 stores and relates assets for $5.175b cash
• RAD up 15% pre-market, FRED indicated lower

To contact the reporter on this story: Arie Shapira in New York at ashapira3@bloomberg.net

(Bloomberg) -- Position for a flatter SEK 5y/10y vs USD curve in order to hedge against global steepening risks, SEB’s Head of European Macro and Fixed Income Research Jussi Hiljanen writes in note.

• With the ECB gradually turning less dovish, risks of a re- pricing of the SEK curve are increasing once markets also begin to price a turn of the Riksbank’s monetary policy cycle, resulting in a substantial under-performance of the SEK 5y segment and a flattening of the SEK 5y/10y curve
• With the Fed expected to hike cautiously, flattening potential of the USD 5y/10y curve is much more limited
• SEK 5y/10y trades near record steep vs the USD curve
• Forwards are pricing ~6bps relative flattening in 12m
• Recommends positioning for a flatter SEK 5y/10y vs USD 5y/10y curve with 1y fwd start; spread currently at 43bps, longer term target 0bps

To contact the reporter on this story: Love Liman in Stockholm at jliman1@bloomberg.net To contact the editors responsible for this story: Ven Ram at vram1@bloomberg.net Neil Chatterjee

--VERONICA EK

(Bloomberg) -- ICRA on Wednesday cut Bank of Maharashtra’s Basel III tier 1 bonds to A- from A and tier 2 notes to AA- from AA, the ratings company says in a statement on its website.

• Weak operating and financial performance during last financial year ended March 31 prompted the downgrade, says ICRA, adding that increasing non-performing assets and net losses during the year resulted in significant weakening of solvency levels
• Lender has one of the lowest provision coverage ratios in the industry at 35% as on March 31: ICRA
• “Given the current low provisioning coverage, ICRA expects the bank’s credit costs to remain high over the next two years on account of both incremental slippages and ageing of current NPAs,” analysts including Karthik Srinivasan wrote in the note
  • “This will result in profitability pressures remaining high in the near to medium term”
• ICRA’s estimates the bank will need to raise common equity of INR20b- INR30b during this fiscal year and next to meet the minimum regulatory capital requirements
  • “These capital estimates will also increase to the extent of the losses reported by the bank during the projected period”
• Ratings continue to draw comfort from the bank’s majority sovereign ownership and its healthy and stable deposits base
• ICRA has also downgraded Bank of Maharashtra’s Basel II lower tier 2 notes to AA- from AA and upper tier 2 bonds to A+ from AA-
• Related story:
  • RBI initiates prompt corrective action on Bank of Maharashtra

To contact the reporter on this story: Divya Patil in Mumbai at dpatil7@bloomberg.net To contact the editors responsible for this story: Neha D'silva at ndsilva1@bloomberg.net Chan Tien Hin

(Bloomberg) -- Here’s a roundup of Indian co. debt-rating changes.

• To get this story sent to your inbox real-time, run NI INRATINGS, click on Display & Edit, then Set Alert Delivery

UPGRADE

• Asha Diamond
  • Long-term bank facilities raised to BB+ from BB at Crisil
  • Cites improvement in liquidity due to consistent funding support from promoters