Our Experts Comment the Times Series

See All the Comments

Choice Prices? In That Market??

15 February 2018 by lberuti

IJSS ( Intrum Justitia AB ) provides credit management services and solutions. It is based in Stockholm, but it has been expanding through acquisitions. It has agreed to purchase CAF SpA, one of Italy’s largest domestic loan servicers, from Lone Star Funds in December and it bought Norwegian rival Lindorff AB last year. The company is still on an expansion trail and would be looking for a partner to buy a €12Bln portfolio of bad loans from ISPIM ( Intesa Sanpaolo SpA ) at 30% of its face value. The deal would be financed with €2Bln of bank loans and about €1.5Bln of equity which would be split between ISPIM and the Swedish debt collector. As part of the transaction, IJSS would buy 51% of Intesa’s credit servicing unit, valued at roughly €500mln, and manage some of ISPIM’s existing and future non-performing loans. While some dealers were put off by the prospects of the deal, others reckoned it could easily be financed using IJSS undrawn RCF of €700mln. At the end of the day, IJSS moved in line with the broader market, but while bid/offer spreads have opened noticeably with the recent market volatility, investors had choice prices on IJSS’s 5-year CDS: sceptic dealers were bidding protection at 294bps and optimistic dealers were offering it at the very same level.