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Debt Maturities Extended + Fresh Equity Injected

21 October 2020 by jbchevrel

Today the debt collector Garfunkelux (GFK) CDS is tighter by -20% of -420bp (!). We close the 5y CDS at 145bp, tonight. The cash GFKLDE 11% Nov 23s rallied more than 15pt today, closing at the highest level since February. The £230m of 11% Nov 23s are now trading at a premium (101.5). This was the biggest daily increase since these bonds were issued in 2015. This impressive rally was based on company’s new bond sale plan (£1.6b) and fresh equity (£0.6b). That will enable them to redeem existing debt. They said they will issue new Senior Secured Notes whose proceeds will be utilized to 1/ redeem certain existing notes 2/ partially repay drawings under RCF 3/ pay down certain expenses 4/ keep room for future debt portfolio purchases. The New Deal includes € and £ 5NC2s (£400m and min. €500m) and € 5NC1s (min €500m). All with CoC clause at 101pt.