Antolin - comment

We were discussing with some of you that the bonds would drop a little this morning - mostly because there is a continued search for underperforming automotive suppliers on the back of weak volumes in Q2 - in turn driven by steep tariffs, flat macro growth and low consumer confidence. However, we were further disappointed with Antolin’s performance in North America, which is not fully explained by the sale of its trunk trim business and the USD weakness, but displays more tariff-driven production volatility than we had finally come to expect. In Asia, alarmingly, Antolin seems to be losing significant business to Chinese internal OEMs, while its local clients (international brands mostly) are losing market share. The company has drawn its new €150m ICO-backed syndicated loan and has met covenants. But management have dropped guidance by almost €10m EBITDA, albeit cash flow is supposed to make up for it. The diestment plan is largely completed with no further actions in the pipeline. So risk/return from here should largely rest on fundamentals.