AMS Osram - comment

Fitch has downgraded AMS Osram to B, from B+, citing the weaker-than-expected demand from end markets, leading to lower utilisation of capacity, and in turn lower margins. On the flip side, Fitch expects mid-single-digit revenue growth from 2026. 

Separately, market speculation around the sale of the Kulim facility in Malaysia has subsided. The company remains committed to divesting the site, although the timing of a potential transaction remains unclear. The sale, or lack of, will have the biggest impact on trading levels in the short to medium term. The bonds are currently trading at a 9% YTM, and although we see no reason to change our approach at the moment, the upside is probably capped at 8%. We will revisit the name in the next couple of days.