Update on Jaguar Land Rover and its 4.5% euro bond due 2026

Jaguar Land Rover (JLR) presented its quarterly results at the beginning of February, an opportunity to evaluate the car manufacturer, owned by Indian Tata Motors, and more specifically the issue of its warranty for the remaining two years.

The loan in question has a maturity of January 15, 2026 and a coupon of 4.5%. So the last payment was made recently, which prevents to some extent the interest earned from being paid in the event of a purchase on the secondary market. In this regard, the bond can be purchased at around 100.9% of the nominal value, good for a yield of around 4%.

S&P and Moody’s comment

The price is 100,000 euros with a “BB” rating by Standard & Poor’s, in the “High Yield” or speculative category. This rating is in line with the one given by S&P to the company itself, a rating that was also upgraded by one notch last mid-November (from “BB-” to “BB”). S&P then pointed to stronger free cash flow (free cash flow) and improved profitability.

A few days earlier, Moody’s had also revised JLR’s rating upwards to “Ba3” from “B1”. These announcements have led to an increase in borrowing prices on the secondary market.

Best quarterly profit since 2017

As for the latest published quarterly results, they contain good news.

JLR has announced for the three months ending December 31, 2023 (the third of its 2023-2024 financial year ending at the end of March 2024) its best quarterly profit (before tax) since 2017, at £627 million (+ / – 734 million euros).

The manufacturer adds in its press release that it recorded the best sales in its history for the first nine months of the financial year, that is, 21.1 billion pounds (+/- 24.7 billion euros) .

The finance director also highlighted “the record free cash flow that made it possible to reduce net debt to 1.6 billion pounds (+/- 1.9 billion euros)”.

Great interest in the electric Range Rover

JLR has clearly benefited from renewed customer interest in the brand’s designs.

The new Range Rover Electric, which will be launched soon, seems to be attracting a lot of people with more than 16,000 registrations on the waiting list since it opened, the manufacturer said.

The latter is optimistic, indicating that it is on track to achieve profitability and cash flow targets, allowing for further debt reduction.