Global EM Corporate Credit Strategy: Going long WESODA 28s vs short SISETI 29s

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Global EM Corporate Credit Strategy: Going long WESODA 28s vs short SISETI 29s

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23 Jul 2026 07:30:20 ET │ 11 pages

Global EM Corporate Credit Strategy

Going long WESODA 28s vs short SISETI 29s

CITI'S TAKE

Alexander Rozhetskin AC

We are initiating a relative value trade, going long WESODA 28s vs short +44-20-7508-4787

SISETI 29s, to capitalize on an excessive spread. The current spread of alexander.rozhetskin@citi.com

nearly 200bp is wide vs. historical range and fails to reflect WE Soda's

stronger credit profile, which features higher margins, better free cash flow

conversion, and a modest ratings advantage. In our view, the market is over-

penalizing WE Soda for governance risks and elevated post-acquisition

leverage while not fully reflecting Şişecam's weaker cash generation, higher

leverage, and more complex liquidity profile. WE Soda offers a clearer

deleveraging path, supporting our preference at current levels. Key risks to

this trade, which targets 100bp of spread compression, include a deeper

soda ash downturn, weaker-than-expected synergy delivery, and renewed

technical support for SISETI bonds.

Relative value trade initiation — We recommend going long WESODA 28s vs short

SISETI 29s. The current spread of nearly 200bp is excessive compared to its

historical 100bp range. We target 100bp of spread compression with a stop-loss at

300bp. This trade offers positive carry while awaiting convergence. The market is

over-penalizing one credit for governance risks while under-appreciating the other's

weaker fundamentals.

Preference for stronger credit profile — We prefer the long position in WE Soda due

to its stronger credit profile. The company has industry-leading margins and better

free cash flow conversion. Pro forma FCF was $517mn in FY25.