Tuesday 06 February 2018 by FIIG Research At FIIG

The brand new 2018 Credit Report has arrived

This year, Research are changing the way they present their views and introducing a brand new research publication that you can’t afford to miss


We are delighted to announce that FIIG Research has released its 2018 Credit Report, a new addition to the research team’s publications. It offers the first opportunity to see our revised research template and includes our new Recommendations and company specific Credit Outlooks.

The current plan is to refresh this publication every six months – after the bulk of the issuers have reported – and include new issuers that we have started to cover. This first Credit Report will be more comprehensive than the ones in the future, as it will include full research reports on all the corporates that we cover.

To see the full 2018 Credit Report, please click here.

This Credit Report was researched and developed by our dedicated Research team – Head of Credit Research Mark Bayley, senior analysts Asmita Kulkarni and Will Arnold, and credit research analyst Bonnie Corbett. Their tremendous effort to coordinate the whole project aims to give our clients additional in depth insights into our credit views.


For notes that Research covers – including all FIIG-originated notes – we believe that the best way to express opinions is by recommending which notes we believe offer relative value and those notes that don’t. As such, the front page of all our research will carry a Recommendation:

  • Outperform (O/P) – the note is expected to outperform the sector over the next 12 months
  • Market Perform (M/P) – the note is expected to perform in line with the sector over the next 12 months
  • Underperform (U/P) – the note is expected to underperform the sector over the next 12 months

Credit Outlooks

To help to improve clients’ understanding of Research’s views, we will also publish a Credit Outlook for a company. This Credit Outlook will be based on whether over the next 12 months, the credit fundamentals of the business are expected to improve, deteriorate or remain largely unchanged:

  • Positive – credit fundamentals are expected to improve over the next 12 months
  • Stable credit fundamentals are expected to remain largely unchanged over the next 12 months
  • Negative credit fundamentals are expected to deteriorate over the next 12 months

By using both a Recommendation and Credit Outlook, we believe that our views can be expressed more clearly to clients. For example, there may be a situation where a company is producing strong financial results and is using free cash flow to deleverage, so the Credit Outlook would be Positive. However, if the company’s notes were trading at only 3% on YTW basis and we believed that there was better value to be found in some of the other notes in the sector, we would rate the notes Underperform.

In summary, an Underperform rating does not necessarily mean that we expect to see a material adverse change in the note’s price but it indicates that within that sector, we see better relative value opportunities. Having said that, there may be instances where a company’s results are weak, free cash flow generation poor and leverage increasing. We may believe that the notes are trading too high in price and too low in yield for the associated risk and that we see better relative value opportunities within the sector. In this case, the Recommendation and Credit Outlook are likely to be Underperform and Negative, respectively.

The complete 2018 Credit Report includes:

Background – Macro outlook

Given our view of a benign economic backdrop for 2018 and that credit fundamentals are expected to remain robust, it may come as a surprise that we are recommending investors position portfolios in a more defensive manner. This conservative positioning is reflected in our sector outlooks. See the review here Macro Outlook 2018

For the complete report, please see this link 2018 Credit Report.

Please note, all content above requires a FIIG wholesale login.

Table 1 – Complete list of issuer reports

Financials Industrials Infrastructure Property  Transport & Mining Services 

Table 2 – Complete list of issuer reports for retail investors

Financials Industrials Infrastructure Property Transport & Mining Services