Reorg on the Record; The European primary market remains favorable

Written by Noor Sehur, Analyst Team Lead, EMEA Core Credit || The European primary market continues to remain favourable for new issuances. Reorg’s primary pipeline shows 36 companies with near-term maturities, 16 possible LBO deals and three deals from bolt-on acquisition financings which could take advantage of the attractive primary market. Recent deals with attractive pricing included Gatwick’s 4.375% 2026 bonds. The bonds were supported by the airport’s exposure to short haul flights, and equity cushion despite continued travel demand uncertainty. Advanz Pharma’s 2028 bonds also offered a premium to comparable bonds. Although most deals have priced tighter than original guidance in recent weeks, we have started to see pushback from investors on tighter margins. Douglas cut the €1.08 billion loan part of its debt package to €600 million while upsizing the SSNs to €1.305 billion from €1 billion and PIK notes to €475 million from €300 million, providing additional buffer to the secured debt investors. Pricing was also increased by 50 bps on the loan and the SSNs amid significant execution risks in the group’s transformation plan, near term cash burn and heavily adjusted EBITDA. In the loan market, margins widened on LGC Group‘s cov-lite term loan B, Idemia’s first lien term loan and Belron’s term loan B. || Sign up for our weekly updates here.