“With a strong business profile and our ability to consistently deliver substantial free cash flow, the group is aiming to maintain investment-grade credit ratings,” chief financial officerassured analysts last week, noting that it plans to keep its borrowings at between 1.5 and 2 times earnings before interest, tax, depreciation and amortisation.
Recent developments in global bond markets suggest he’s right. While the market interest rates – or yields – attached to all types of bonds have risen on both sides of the Atlantic in recent months, amid speculation about the pace at which central banks will hike official rates and wind down bond-buying programmes, the speculative high-yield debt market has borne the brunt.
Another breed of number cruncher has been charmed most by Smurfit Kappa in recent times: analysts at some of the world’s most influential credit ratings agencies. Investors have pulled almost $17 billion of out US junk-bond funds over the past six weeks, the most since early 2020, when financial markets were in panic mode, according to figures from financial markets data firmHighly-indebted companies, too, have become more concerned about the reception they might get.