16 October 2015 by lberuti
So NSINO (Norske Skogindustrier ASA) eventually paid their 2015 bonds. The company has apparently decided to buy some time in order to find a suitable solution to manage their considerable debt pile. Their next maturity falls in May 2016, but once these junior bonds will have been paid, there will be very little cash to redeem other maturities. It is therefore no surprise that holders of longer dated bonds are mulling restructuring plans. A group of investors holding NSINO’s 290mln euros of senior bonds due 2019 allegedly met with the company to discuss a possible debt for equity swap. Holders of junior bonds due 2017 approached management with an alternative plan that included extending their claims until after 2019. The company is conveniently in blackout period ahead of its results on October 22nd. They should expect a grilling then regarding their intentions. But in the meantime, as their willingness to kick the can down the road was evidenced by the payment made yesterday, investors have steepened the risk premium curve of NSINO on the short end. The 1 year CDS closed today at 29pts upfront, 10pts lower than 2 days ago.