12 November 2020 by jbchevrel
TUI AG is Europe’s largest tour operator. TUI is in all XOvers since s03, except s25. Tuesday TUI tightened -120bp to 840bp or 12.75% on the 5y. Today it closed 14.5% as market participants add Brexit-linked risk premium and weigh the fact that the way out of the COVID is everything but linear despite the Pfizer news earlier this week. For context, Before TUI got saved by the state in April, the 5y CDS reached 46%. It then tightened until 6% in September. In September, TUI made cuts to their winter holiday schedule and warned of a hit from more refund requests. TUI CDS therefore retraced wider as more restrictions came in Europe in October. Earlier this week, it was reported that TUI is in talks with the German government to obtain an additional €1.5-1.8B in state aid as two earlier bailouts this year prove insufficient. The money could be granted by Germany’s new economic stabilisation fund WSF. It could involve a mixture of equity and hybrid debt and between €1-2B are being discussed. TUI already received a total of €3B of state-backed loans in 2 tranches this year. TUI said it could issue new shares but clarified last month that it wanted to wait for its share price to recover before doing so. In case the latter happens. One day.