Our Experts Comment the Times Series

See All the Comments

Hollandsche Eenheidsprijzen Maatschappij Amsterdam

02 October 2019 by jbchevrel

HEMA BondCo I B.V. (HEMABV) is a Dutch discount home ware retailer operating in Western Europe. Today the 5y CDS of HEMABV widened by c180bp after reaching +215bp intra day. HEMABV thus underperformed other constituents of iTraxx XOver s32 (index +7 NAV +7). In cash the seniors came down -4pts and the subs came down -8pts €150M 8.5 Jan23s. This new leg wider took the 5y CDS to the widest level since 2016, at 940bp i.e. 16% upfront vs 500bp coupon. HEMABV said although like-for-like sales in Q2-19 gained +1.6%y, adjusted EBITDA dropped -25% YOY. Leverage therefore increased from 6.2x to 7.5x. As far as the geographic split of sales growth. Germany was strong +26.1%y Frabelux okay +4%y. As far as strategy developments, management reminded that Walmart will start selling HEMABV products online in the US this week and the first 15 Franprix supermarkets in France now have a dedicated HEMA corner. That is not negative. However the non sale of the bakery thing is a positive out. Management also confirmed an equity injection from Ramphastos Investments (owned by Dutch billionaire Marcel Boekhoorn) to finish pushing out British PE Lion Capital. As expected in April 10 comment, the name has decently widened (700 to 900+) since then and is now #4 widest name in XO32, after bopr cma mtn.