Credito Real (BB/BB+): excessive pressure on prices
smartmoney.oneSource: Bloomberg, ITI CapitalTo the date Credito Real has 4 dollar-denominated issues outstanding (incl. perp) and one issue denominated in euro (CREAL 27, YTM 6%).We particularly like CREAL 2026 (YTM 7.77%) and CREAL 28 (YTM 8%) that trade with almost 5-7% upside to its 52-week high and look underpriced.CREAL 27 (EUR) also looks attractive when swapped into dollar yield.Credito Real recently posted mixed FY2020 IFRS financials.Earnings, though gradually recovering, still look weaker compared to 2019.
Although bank cut relief programmes amid weaker demand, they still comprise more than 5% of the total portfolio as of 4Q20 (8.6% in 1H20).