New Issue Commentary: Rolls-Royce, Arla Foods, Arcadis, And Amadeus

RBC analyst Daniel Hosegood provides credit commentary on new euro-denominated debt issuances from Rolls-Royce, Arla Foods, Arcadis, and Amadeus.

Key Takeaways

• 1.Rolls-Royce has successfully migrated from high yield to a solid investment-grade rating (BBB+/A3/A-) driven by strong organic growth and significant margin expansion (24% expected in 2025).
• 2.Arla Foods is set to become Europe's largest dairy co-operative post-merger with DMK, with pricing of new issues expected to align with generic BBB consumer names.
• 3.Arcadis requires a spread premium due to limited revenue visibility and significant equity price volatility related to contract-level issues.

Table of Contents

• IPT: ROLLS-ROYCE €1B WNG; 5Y MS+90 AREA, 10Y MS+120 AREA
• Relative value
• IPT: Arla Foods EU1b WNG; 3Y MS+90 Area, 7Y MS+135 Area
• IPT: ARCADIS EXP. €300M 5Y MS+160 AREA
• IPT: AMADEUS €500M WNG 5Y MS+120-125

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