10.43 0.00 (0.00%)
Before hours: 4:18AM EST
|Bid||10.37 x 28000|
|Ask||10.42 x 38500|
|Day's range||10.01 - 10.48|
|52-week range||5.48 - 13.26|
|Beta (5Y monthly)||0.78|
|PE ratio (TTM)||29.63|
|Forward dividend & yield||0.04 (0.39%)|
|Ex-dividend date||25 Sep 2020|
|1y target est||N/A|
(Bloomberg) -- Back in July, it seemed as if the outperformance of junk-rated notes from Argentine power generator MSU Energy was an anomaly. Five months later, it’s a lot less of a surprise.The company’s $600 million of overseas notes due in 2025 returned almost 31% last month, handily beating all other corporate peers from the developing world. The reason: Power plant upgrades that drove a 27% increase in third-quarter earnings, plus a steady stream of dollar-based revenue that leaves it less squeezed that other local firms by the latest foreign-exchange controls.Chief Financial Officer Hernan Walker said on the quarterly earnings call last month that MSU isn’t expecting any changes to its revenue streams anytime soon. He cited long-term power purchasing agreements with the Argentine government that are paid in dollars and account for 92% of revenue. MSU, based in Buenos Aires, manages three natural gas-fueled power plants for a total 750 megawatt output capacity.The rally is all the more remarkable because just four months ago, Argentina investors were buying the bonds on a bet that the nation’s sovereign debt restructuring, which took place in early September, would jump-start a recovery in South America’s second-largest economy.READ MORE: Moon-Shot Bets on Junk Power Bond in Argentina Bring a WindfallThat didn’t happen. Instead, the government’s patchwork economic policies sent investors fleeing as authorities tried to control a currency crisis and bring back foreign reserves that have slumped to a four-year low.Argentine bonds, MSU included, tumbled in September, and sovereign bonds now trade at about 30 to 40 cents on the dollar, well below the 55-cent restructuring price. MSU’s bonds due in 2025, by contrast, fetch almost 70 cents on the dollar.There are risks, including a $103 million loan from General Electric Co. that will keep MSU’s liquidity tight in the year to come, according to Roger Horn, an emerging-market strategist at SMBC Nikko Securities America in New York. There’s also a risk of payment delays from Cammesa, the state-controlled electricity wholesaler, Horn said in an interview.Still, upgrades to two of MSU’s thermal energy power plants are giving investors faith the firm will prove a stable credit, Horn said. “The completion of the plant upgrades was a big catalyst for the gains,” he said.MSU plans to repay the GE loan before the first principal payment comes due on the company’s 2024 bonds next November, Walker said last month.For more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2020 Bloomberg L.P.
(Bloomberg) -- Silicon Valley veteran Michael Moe is in talks to raise capital through a blank-check firm to pursue a deal in education technology, an industry buoyed by the Covid-19 pandemic, according to people with knowledge of the matter.Moe is set to be chief executive of a new entity, tentatively dubbed Class Acquisition Corp., said one of the people, who asked not to be identified because the talks are private.Confidential paperwork has been filed with the Securities and Exchange Commission ahead of an initial public offering for the special purpose acquisition company, which aims to raise $200 million to $250 million, some of the people said.Joe Parsons and Bob Daugherty are slated to be the SPAC’s co-chairmen. Daugherty is executive dean of the Forbes School of Business & Technology at the University of Arizona Global Campus, and Parsons previously served on the management committee of Bridgewater Associates. Both men also are alumni of GE Capital.Moe declined to comment. Parsons and Daugherty didn’t immediately reply to requests for comment.GSV VenturesMoe, who rose to prominence as an equity research analyst, was chairman and chief executive officer of boutique investment bank ThinkEquity before founding Global Silicon Valley, which invests in the education-technology sector through its GSV Ventures arm. He has backed online course providers Coursera and Course Hero, app-maker Class Dojo and digital-credential service Parchment, as well as larger players like Chegg Inc., Pluralsight Inc. and 2U Inc.U.S. SPACs have raised more than $64 billion this year, a record sum that’s approaching the $72 billion raised in all prior years combined, according to data compiled by Bloomberg.For more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2020 Bloomberg L.P.
(Bloomberg Opinion) -- Exxon Mobil Corp. is about to lose perhaps $20 billion from its books. But it has lost something worth maybe 10 times that amount: its reputation.Exxon used to occupy the penthouse in that ivory edifice known as Supermajor Towers. Its neighbors shared this rarefied space but got off the elevator many floors below.Today, Exxon trades at a 16% discount to its peers on price to book. All else equal, if it still enjoyed its historic premium — 92% on average in the five years leading up to 2016 — it would be worth roughly $200 billion more than it is. Exxon’s historic premium rested on a reputation for being the smartest oil major in the room. Smart at executing big, complex projects. Smart at being disciplined with its capital and making strategic bets. The operational reputation remains intact. It is the reputation for the latter that has crumbled.The upcoming $17 billion to $20 billion write-down of natural gas assets closes a chapter that began almost exactly 11 years ago with the announcement of a $41 billion offer for shale-gas driller XTO Energy Inc. The subsequent collapse of natural gas prices made guessing the timing of an eventual impairment something of a parlor game in industry circles. The only surprise is that it took so long.Two decades ago, Exxon had just closed the deal that created its modern incarnation, the $80 billion takeover of Mobil Corp. It was a masterstroke, both of timing — just before the supercycle kicked in — and in gaining choice assets such as Qatar’s liquefied natural gas riches.But Exxon has since made several major missteps. Before XTO, it was wrongfooted by the turnaround in the U.S. gas sector, investing in import capacity that had to be switched to export instead. It made a big bet on Russia that was then hamstrung by sanctions after the annexation of Crimea — hardly Exxon’s fault, but a big blow to development plans nonetheless. Meanwhile, a foray into Iraq was long on barrels but short on margins, and Exxon may be about to withdraw altogether from there, too.Along the way, Exxon’s reputation for discipline has eroded alongside its return on capital, the metric it evangelized on Wall Street under former CEO Lee Raymond. This has become acute under current CEO Darren Woods, whose pre-Covid spending plans amounted to effectively replacing most of the major’s gargantuan fixed-asset base in the space of five years, and in the teeth of ongoing oil-price weakness and the looming threat of peak oil demand. It’s the sort of counter-intuitive strategy only companies with Exxon’s reputation could get away with. Except the collapse in the stock’s premium — and capitulation on the strategy earlier this year — show that it wasn’t getting away with it.There is a parallel here with another American icon, General Electric Co. As a true conglomerate, GE’s valuation rested largely on the belief that its leadership could make (and execute) smarter bets than the market. A series of bad ones, not least in the energy business, eventually trashed that — along with the dividend. My colleague Brooke Sutherland counts at least $30 billion of GE write-downs linked to its energy investments in the past two years.Exxon’s dividend remains intact; with buybacks and blockbuster budgets having been ditched already, that roughly $15 billion annual payout represents the last redoubt. Further cuts to spending, also announced Monday, are designed to defend it. Still, the wording on Exxon’s press release about “working to maintain a reliable dividend” carries a discomfiting note of ambivalence for this company.Indeed, this captures the essence of the problem. Exxon has been selling assets or borrowing to cover its dividend for a couple of years already. Net debt-to-capital has climbed from about 15% to almost 25% in that time (the write-down could take it about 27%). By taking on such leverage, Exxon has slowly but surely turned its stock into the very thing the supermajors are not supposed to be: an oil-price play. It’s the sort of risky equity story that can be found all too easily across this sector. This column does not necessarily reflect the opinion of the editorial board or Bloomberg LP and its owners.Liam Denning is a Bloomberg Opinion columnist covering energy, mining and commodities. He previously was editor of the Wall Street Journal's Heard on the Street column and wrote for the Financial Times' Lex column. He was also an investment banker.For more articles like this, please visit us at bloomberg.com/opinionSubscribe now to stay ahead with the most trusted business news source.©2020 Bloomberg L.P.