>>> Europe : Brokers Upgrades & Downgrades - 15th of June 2016

>>> Up
*ANDRITZ RAISED TO BUY AT HSBC
*DANONE RAISED TO NEUTRAL VS REDUCE AT ODDO
*GEMALTO RAISED TO NEUTRAL VS SELL AT GOLDMAN
*GO-AHEAD GROUP RAISED TO OVERWEIGHT AT JPMORGAN
*PERNOD RICARD ADDED TO CONVICTION LIST AT GOLDMAN
*SHELL RAISED TO MARKET PERFORM VS UNDERPERFORM AT BMO

>>> Down
*BRICORAMA CUT TO ADD VS BUY AT ALPHAVALUE
*LONMIN CUT TO SELL VS NEUTRAL AT UBS
*MARKETO CUT TO MARKET PERFORM AT JMP SECURITIES
*SCANA CUT TO UNDERWEIGHT/IN-LINE AT MORGAN STANLEY
*STADA CUT TO UNDERPERFORM AT JEFFERIES

>>> PT Change


>>> Initiation
*LUXOTTICA RATED NEW OUTPERFORM AT CREDIT SUISSE, PT EU52
*WACKER CHEMIE RATED NEW BUY AT BERENBERG, PT EU98
*WOOD GROUP RATED NEW BUY AT JEFFERIES

>>> Call
>> Stock
*PERNOD RICARD ADDED TO CONVICTION LIST AT GOLDMAN

>>> Asian Update

Asian Mid-session Market Update: MSCI again defers including China A-shares into Emerging Market index


***Economic Data***
- (AU) AUSTRALIA JUNE WESTPAC CONSUMER CONFIDENCE INDEX: 102.2 V 103.2 PRIOR, M/M: -1.0% V +8.5% PRIOR
- (AU) Australia ANZ Roy Morgan Weekly Consumer Confidence Index: 116.4 v 116.8 prior
- (NZ) NEW ZEALAND Q1 CURRENT ACCOUNT BALANCE (NZ$): +1.31B V +0.96BE; first surplus in a year
- (NZ) New Zealand May REINZ median home price +10.3% y/y v +7.7% prior; Home sales y/y 13.6% v +18.4% prior; Home sales 9.8K v 8.6K prior
- (KR) SOUTH KOREA MAY UNEMPLOYMENT RATE: 3.7% V 3.8%E
- (KR) SOUTH KOREA MAY IMPORT PRICE INDEX M/M: +3.5% V -1.8% PRIOR; Y/Y: -5.1% V -7.1% PRIOR

***Index Snapshot (as of 04:30 GMT)***
- Nikkei225 +0.7%, S&P/ASX -0.4%, Kospi +0.2%, Shanghai Composite +1.5%, Hang Seng +0.4%, Sep S&P500 flat at 2,065

***Commodities/Fixed Income***
- Aug gold -0.1% at $1,286/oz, Jul crude oil -1.4% at $47.81/brl, Jul copper +0.4% at $2.05/lb
- SLV: iShares Silver Trust ETF daily holdings rise to 10,661 tonnes from 10,587 tonnes prior; highest since Dec 2014
- GLD: SPDR Gold Trust ETF daily holdings rise 2.4 tonnes to 898.7 tonnes; highest since Oct 2013
- (US) Weekly API Oil Inventories: Crude: +1.2M v -3.6M prior
- (CN) PBOC to inject CNY65B in 7-day reverse repos
- USD/CNY: (CN) PBOC SETS YUAN MID POINT AT 6.6001 V 6.5791 PRIOR; weakest Yuan setting since 2011
- (CN) China MoF sells 7-yr bonds at 2.95% v 2.96%e
- JGB: (JP) Bank of Japan (BoJ) offers to buy ¥350B in JGBS with 1-3 yr maturities; ¥440B with 3-5 yr; ¥220B with 10-25 yr; ¥140B over 25 yrs

***Market Focal Points/FX***
- Asian equity markets are mixed as traders squared some of the recent bearish bets going into Wednesday's FOMC and BOJ policy decisions. Stocks were initially lower - particularly the indices in Shanghai and Hong Kong - after Morgan Stanley Capital International (MSCI) again postponed including the A-Shares in its emerging market index. Similarly, risk-off flows initially translated into gains in JPY at the expense of AUD and NZD before a reversal later in the day. USD/JPY hit a low around 105.95 early on but then bounced to 106.30, while AUD/USD and NZD/USD rose 40pips and 50pips from the lows respectively above 0.7370 and 0.7020.

- Momentum in expectations that MSCI will finally include A-shares in its emerging market index had been building as of late given some of the financial regulatory reform in China over the past 12 months in fact, Goldman Sachs assigned about a 70% probability of inclusion. However, for the 3rd year in a row, MSCI deferred that inclusion while acknowledging the improvements in market accessibility. Among the reason behind the decision, MSCI said the "20% monthly repatriation limit remains a significant hurdle for investors that may be faced with redemptions such as mutual funds and must be satisfactorily addressed", adding that local exchanges' pre-approval restrictions on launching financial products are also unaddressed. MSCI did suggest however that A-shares would remain on 2017 review list and that a potential off-cycle announcement on A shares cannot be ruled out. After the decision, securities regulator CSRC said the decision to delay including A-share won't affect capital market reform. Similarly, state researcher Zhang said China should not make major changes to financial regulation framework because of downside risks remaining in the near term.

- Outside of the aftermath of MSCI decision, PBoC said the current FX reserve levels are generally within appropriate range, promising to fend off potential risks in managing fx reserves. Recall the latest data on FX reserves saw the first decline in 3 months to the and lowest level since Dec 2011 at $3.19T. Separately, China Commerce Ministry said retail sales are expected to stabilize for the balance of this year after May retail sales data hit a 1-year low at 10.0% y/y increase. Traders are still awaiting the latest money supply and new Yuan loans data from China expected later today.

- Economic data was again centered in Australia, where June Westpac Consumer Confidence growth came off multi-year highs seen last month. Westpac economist said that "after the 8.5% surge in May, the small decline in June mostly represents a consolidation at improved levels" as consumers digested the surprise RBA rate cut last month which had served as a catalyst to the rally. S&P report on Australia housing speculated that a sharp price correction is unlikely given some "buoyant investment flows" in the property space.

- With just over a week to the Brexit referendum, latest Comres poll put 46% in favor of staying in EU vs 45% for leaving (prior 52% for staying in EU, 41% for leaving), and researchers at Oxford University put about a 40% chance that the vote will be in favor of Leave. Fin Min Osborne remained vocal backing EU membership, estimating a £30B financial hole to UK economy in the event of a Leave victory and forcing an emergency budget within weeks of the poll.

***Equities***
US equities / ADRs:
- BOBE: Reports Q4 $0.48 v $0.42e, R$345.6M v $345Me; -6.1% afterhours
- HCLP: Offers 3M common units through Credit Suisse (~8% of shares outstanding); -6.5% afterhours
- BBBY: Purchases One Kings Lane, Inc; Terms not disclosed, purchase price not material; Transaction to be slightly dilutive to FY16 EPS

Notable movers by sector:
- Consumer discretionary: Gome Electrical Appliances Holdings 493.HK +2.3% (share buyback); Skyworth Digital 751.HK +10.0% (annual result); Tsuruha Holdings 3391.JP +8.5% (annual result)
- Consumer staples: A2 Milk ATM.NZ +13.4% (raises guidance)
- Industrials: Xinyi Glass Holding Co 868.HK -2.8% (guidance); Virgin Australia VAH.AU -12.9% (equity raising); Takata Corp 7312.JP +1.3% (divestment speculation):
- Energy: Xinyi Solar 968.HK -1.0% (guidance); Senex Energy SXY.AU -1.7% (affirms guidance)

WSJ : Uber to Raise Up to $2 Billion in Leveraged-Loan Market

Uber to Raise Up to $2 Billion in Leveraged-Loan Market

Loan would bring to some $15 billion the funds the cash-hungry ride-sharing firm has raised

By Maureen Farrell, Matt Wirz and Douglas MacMillan
Updated June 14, 2016 1:44 p.m. ET
Uber Technologies Inc. is turning to the so-called leveraged-loan market for the first time to raise as much as $2 billion, in a sign of the popular ride-sharing network’s hunger for cash as it expands around the world.

Uber has hired Morgan Stanley and Barclays PLC to sell a so-called leveraged loan of $1 billion to $2 billion to institutional investors, people familiar with the matter said. The company plans to issue the debt in coming weeks, some of the people said. There is no guarantee the deal will take place.

The move comes on the heels of Uber’s sale of a $3.5 billion equity stake to the investment arm of Saudi Arabia—part of a $5 billion funding round that was the largest single injection into a venture-backed company—and underscores the cost of its quest for global market share. The new loan would bring to roughly $15 billion the amount raised in debt and equity by Uber, which has been valued at $68 billion.

Uber is hoping to price the loan with a yield of 4% to 4.5%, some of the people said, but it is unclear whether the company will achieve a rate that low, especially given it is a first-time issuer. The average yield on new leveraged loans ranges from 3.9% to 5.5%, according to data from S&P Capital IQ LCD.

It is unclear what exactly the use of the new funds would be, but Uber spends millions of dollars to attract riders and drivers, especially in less-established markets. It offers cash bonuses to new drivers and subsidizes the cost of lower-priced rides. The company has said it is profitable in its most developed markets.

Uber has also been pouring funds into China, where it is engaged in fierce competition with the country’s largest ride-sharing company, Didi Chuxing Technology Co. Didi itself is in the process of raising money from equity investors that could top $3.5 billion and value the company at more than $25 billion.

By placing debt rather than equity, Uber can also avoid diluting its existing shareholders. Uber Chief Executive Travis Kalanick has indicated the company is unlikely to go public for at least another year, which could help explain why it is seeking more unorthodox sources of funds. Startup technology companies rarely tap the leveraged loan market because institutional investors usually reject borrowing requests from companies like Uber that lose money. Unlike stock pickers who often buy on expectations of future growth, debt investors focus on a company’s ability to generate the cash it needs to repay obligations.

But Uber and its investment bankers are hoping loan fund managers will overlook the company’s losses because of its lofty valuation, which is nearly $25 billion more than that of General Motors Co. A new $2 billion loan would amount to just 3% of Uber’s equity value, and if its business started to falter, the company could easily raise cash by cutting expenses in peripheral markets, one of the people said.

Leveraged loans are a private variant of junk bonds. Banks make the loans to companies with below-investment-grade credit ratings and offload them to professional investors such as mutual funds, hedge funds and insurance companies. Issuers of the loans don’t need to publicly report financial information because the debt is sold privately to investors who are thought to be more sophisticated.

That privacy is important to Uber, which guards details of its business such as how much it pays drivers in different cities and profit margins in core markets.

Banks have been clamoring to assist Uber in raising debt and equity in hopes of securing a role on an eventual initial public offering, which will likely represent a major prize on Wall Street.

In 2015, a consortium of banks arranged a $1.9 billion credit facility, also known as a revolver, that Uber can tap as needed. Earlier this year, that facility was refinanced and increased to $2.3 billion, according to Dealogic.