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Honda Motor

Honda's somewhat more diversified business portfolio, which includes Automobile, Motorcycle, Power Products and financial services businesses helps to distinguish it from Toyota and Nissan. Indeed, even as the automotive segment remains the largest driver of consolidated profits, this degree of differentiation helps anchors the firm's free cash flow generation and provide earnings stability. Automobile is Honda's largest business segment (73% of FY17 sales) followed by Financial Services at 13.6%, Motorcycle at 12.5%, with Power Product and Other accounting for the balance. Notably, Honda is the largest motorcycle producer in the world, and is the second largest in the US behind Harley-Davidson. Within the Automobile segment, the NA region accounted for 53% of FY17 global unit sales followed by Asia (19%), Japan (16%), Other (7%) and Europe (5%). Motorcycle sales are largely centered around Asia, where the segment generates 85% of revenues, followed by Other (9%), North America (3%), Europe (2%), and Japan (1%). (26 Sep 2017)

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ESG and Automotive: Ratings and Methodology

Sector Analysis: 14 Nov 2018, 10:23 PM ET - In this piece we discuss our ESG Ratings framework as it pertains to the Automotive sector. We use a total of 13 distinct measures to score each of the 3 ESG parameters and then weight them individually.

China Autos: Slowing Demand Concerns

Sector Analysis: 18 Oct 2018, 7:02 AM ET - September passenger vehicle sales in China marked the third consecutive month of YoY declines. While YTD sales are still up 0.4%, 2018 is already shaping up to be the weakest growth year for the critical China automotive industry. 

American Honda Finance: Healthy NIC

IG Note: 03 Oct 2018, 10:28 AM ET - American Honda Finance is in the market with 3Y floating as well as 3Y and 5Y fixed offerings. We  would view any new issue concession as an opportunity for investors to gain exposure to this high quality captive finance company.

Autoliv: 2Q18 | Moving Forward

Worth Watching: 30 Jul 2018, 12:27 PM ET - Autoliv (A2/A-) reported steady growth in its second quarter despite rising raw material prices against the backdrop of rising trade tensions. Consolidated sales grew 11.5% to $2.2 bn, driven by a 4.2% positive impact stemming from currency tra ..

US IG Strategy: Picks and Pans (July 2018)

Strategy Analysis: 23 Jul 2018, 4:36 AM ET - In this document we summarize our sector recommendations, and provide a few names within each that we like (picks) and dislike (pans). Our Picks and Pans reflect our analysts' current views. 
Focused

American Honda Finance: Attractive New Issue

IG Note: 11 Jul 2018, 10:45 AM ET - American Honda Finance is in the market with 2Y floating as well as 2Y and 5Y fixed offerings. We  would view any new issue concession as an opportunity for investors to gain exposure to this high quality captive finance company.

Toyota Motor Corp: Multi-Tranche Issuance

IG Note: 10 Jul 2018, 11:55 AM ET - Toyota Motor Corp (parent) is in the market this morning with 3Y, 5Y and 10Y fixed offerings. We remain at an underperfom on Toyota family bonds, but would view a +5 bp concession to secondary as attractive.

US IG Strategy: Picks and Pans (April 2018)

Strategy Analysis: 26 Apr 2018, 4:43 AM ET - In this document we summarize our sector recommendations, and provide a few names within each that we like (picks) and dislike (pans). Our Picks and Pans reflect our analysts' current views. 

Toyota Motor Credit: Buy New Issue

IG Note: 10 Apr 2018, 9:53 AM ET - Toyota Motor Credit is in the market this morning with 3Y FRNs as well as 3Y and 7Y fixed offerings.We are at an underperform on the credit based on valuation but would view any new issue concession as an opportunity to add exposure.

US Strategy: Tariffs as Repricing Event?

Strategy Analysis: 01 Mar 2018, 9:40 PM ET - The market has been building in very low odds of a trade war event, a NAFTA withdrawal, or a significant escalation of tit-for-tat trade retaliations on a broader scale.  The odds-makers just got a fresh load of input.

American Honda Finance: 3Y & 10Y Notes Attractive

IG Note: 12 Feb 2018, 11:08 AM ET - Honda Finance is extending the curve with new 10Y issuance in addition to 3Y fixed and floating rate notes. We view any new issue concession as an opportunity to gain exposure to the high-quality captive finance company.
Focused

US IG Autos 2018: Underperform

Sector Analysis: 24 Jan 2018, 4:13 AM ET - Given the short duration bias of the Auto Index relative to the IG Index we expect it will underperform again in 2018. We are taking a more nuanced view and expect GM and F long paper to outperform the ML Index at the long end of the curve.

US IG Strategy: Picks and Pans (January 2018)

Strategy Analysis: 23 Jan 2018, 9:57 PM ET - In this short document we summarize our sector recommendations, and provide a few names within each that we like (picks) and dislike (pans). Our Picks and Pans reflect our analysts' current views. 

Euro Autos: 2018 Outlook

Sector Outlook: 17 Jan 2018, 9:52 PM ET - In this report we review our outlook for the automotive market in 2018, discuss long term trends and short term implications, and update our investment recommendations.

US Strategy: South Korea Trade Risk

Strategy Analysis: 09 Jan 2018, 11:12 PM ET - While the NAFTA countdown and China trade strategy are the main events, South Korea is now moving back onto the stove even if not on the front burner. We look at some of the moving parts of the US-ROK free trade risks.

US Autos 2018: Disruption - Fast and Furious

Sector Analysis: 09 Jan 2018, 4:43 AM ET - 2018 US auto sales will likely soften yet again, but benefits of tax reform and improved economic activity will buffer some moderation. Disruptive trade policy remains a wildcard risk alongside investments in emerging business opportunities

US IG Strategy: Picks and Pans (August 2017)

Strategy Analysis: 15 Aug 2017, 4:28 PM ET - We update our US IG Picks and Pans. In this document we summarize our sector recommendations, and provide a few names within each that we like (picks) and dislike (pans). We also explain why names have been added or removed from the list. 

American Honda Finance: Issuing 3 Yr Notes

Worth Watching: 17 Jul 2017, 2:24 PM ET - American Honda Finance (A1/A+) is marketing USD notes for the second time this year in the form of 18 mo floating rate notes and 3 yr fixed and floating paper. IPT on the 3 yr fixed was +60 bp, though guidance saw that figure trimmed to roughly ..

May US Auto Sales: First Look

IG Note: 01 Jun 2017, 11:06 AM ET - As the first wave of May auto sales are reported by automakers, we expect that YoY industry sales will continue to moderate while SAAR will likely settle in the under 17 mn level for the third consecutive month.

Autos Transcript: Something New, Used and Borrowed

Transcript: 31 May 2017, 10:30 PM ET - We recently held a U.S. autos webinar, pulling in analysts across the OEM, lending, and rental sectors. This is a (heavily) modified transcript of that discussion, as we flesh out touched upon topics and provide supplemental charts/tables.

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