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#SaxoStrats - Europcar bond shows drive and direction

Michael Boye, Fixed Income Trader at Saxo Bank, outlines his latest #SaxoStrat trade: a new Europcar bond. 

This a medium risk play based on the firm's successful IPO earlier this year. The company is moving into the car sharing business, squaring up to Uber and Car2go.    

Europcar is among the largest vehicle rental companies in Europe with operations in more than 140 countries.

The company went public in June 2015 on the Paris Stock Exchange and used the proceeds to reduce debt and fund a strategic move into car-sharing.

Debt reduction included early redemption of more expensive bonds and the introduction of this new bond.

The new bond was upgraded by S&P to B- rating from a previous CCC+.

Management and risk description
Key risks include fierce competition, disruptive new technologies (Google, Uber etc.) and an antitrust claim recently filed by the French Competition Authority.
Parameters
Entry: current market price (€103.25/104.00).

01:37 minutes
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