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Refinancing?

05 June 2017 by lberuti

It was a quiet session with most of Europe out for Whit Monday. Volumes were muted, and most credits traded sideways. The main move came from MTNLN (Matalan Finance Plc). The company released their results for the full year 2017, which came at the top end of previous guidance. In the fourth quarter, sales rose 1% to £242mln, gross profits were up 13% to £19mln and EBITDA was up 11% to £10mln. The group reported full price sales growth of 7.5% which is explained by improved clothing ranges and better in store experience. The release also mentioned investment in quality and design within the core Good and Better offer. The supply chain issues which triggered MTNLN’s risk premium widening at the end of last year were reported to be fully resolved. But what really drew investors’ attention was the buyback of £12mln of their unsecured bonds. They interpreted it as a signal of a possible refinancing operation, and sent MTNLN’s 5-year risk premium 159bps tighter at 902bps.