FORGTL 7 ⅜ 08/15/26 Corp

Forgital Group S.p.A.

Credit, Industrial/Transportation


Publicly traded companies mentioned herein: Carlyle Group Inc/The (CG)

Highlights

The presenter is long the $500MM August 2026 7 ⅜ bond from Forgital (F-Brasile SpA), an industrial parts manufacturer specializing in aerospace and industrial components. 65% of the business serves the aerospace industry and related markets, and 35% serves industrial customers such as engine and machine manufacturers. Acquired by Carlyle Group in 2019, Forgital is a business leader in the forged component industry that enjoys substantial barriers to entry as new market entrants must undergo a lengthy regulatory process to gain approval to operate. Struggling with labor and energy costs for much of this year, Forgital is managing declining investor sentiment as many are concerned with their current cost structure. However, due to its immense pricing power and positioning in the industry, the presenter assesses that markets are underappreciating the business and misunderstanding the credit profile.

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Idea Discussion

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