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Latin American Power
NOTICE: This information is intended only for investors who have sufficient knowledge of English to understand the Prospectus and other information relating to the Notes. The minimum equivalent is $125,000
Key facts
Micron commands 25% of the memory chip market
Micron is the largest manufacturer outside of South Korea
The U.S. considers this company a strategic
The memory chip market is growing at a double-digit rate year-on-year and nothing should change in the future
About company
Micron controls 25% of the memory chip market, with Samsung being the largest player at around 45% and SK Hynix the second largest at 27.5%. This makes Micron the largest manufacturer outside South Korea. The US sees this company as strategic, as virtually no electronics can function today without DRAM and NAND chips. The company's record-breaking performance is helped by the fact that the overall memory chip market is growing at double-digit rates year-on-year, and this should not change in the future
Economy
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For 2021, the company generated EBITDU of USD 13.2 billion and profit of USD 6.3 billion on revenues of USD 27.7 billion
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This year, it expects virtually all of these numbers to increase by 30%
Assets vs. liabilities
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The company reports total liabilities of USD 16 billion and assets of USD 65 billion
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Of this, cash is US$9.15 billion and long-term debt is US$6.85 billion
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In addition, the company's management is absolutely robust, and debt appears to be marginal
Common parameters of bonds
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Minimum quantity: 200 units, but not less than the equivalent of EUR 100 000
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Nominal value: USD 1000
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Hierarchy: senior unsecured
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Rating: BBB (Fitch)
MU 2.703 04/15/32
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Maturity: 15. 4. 2032
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Market Value 778 USD
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Coupon: 2,703 % (27,03 USD)
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Yield to maturity Japanese Simple method: 6,42 %
MU 3.366 11/01/41
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Maturity: 1. 11. 2041
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Market Value: 656,68 USD
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Coupon: 3,366 % (33,66 USD)
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Yield to maturity Japanese Simple method: 6,98 %
MU 3.477 11/01/51
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Maturity: 1. 11. 2051
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Market Value: 700,34 USD
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Coupon: 3,477 % (34,77 USD)
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Yield to maturity Japanese Simple method: 7,054 %
Conclusion
The current price decline mainly reflects interest rate movements and expectations. Inflation should already be past its peak in the US and the Fed is thus committed to its inflation target of 2% on long-term interest rates of 2.35%-2.5%. In our view, current interest rates are an anomaly and not economically sustainable in the long run.
If interest rate expectations flatten to levels prior to this energy and inflation shock, bonds should return to par.
In the case of bonds maturing in 2051, we are talking about a 52% increase.