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Ultimate Credit for Ultimate Factories

09 April 2018 by pdonnat

Fives is a French heavy industry machinery designer, “ultimate machines, ultimate factories” is the company’s motto. The company is two centuries old. It has taken part to the design and construction of a few landmark “iron” icons like the “Pont Alexandre III” in Paris. From modern cement plants to automobile assembly lines, Fives sells turnkey heavy industry solutions. Name after Fives, a Lille's borough, the company is one of the remaining industrial jewel in a region which has lost a lot of its industries over the last 50 years. Fives was taken private and its managers are its main shareholders. The company’s managers decided to engineer the ultimate refinancing of their existing debt for 700M Euros. Paying only 5% for 7 a seven years credit is attractive for a B company. The company is using its financing entity Novafives. The CDS market was anticipating a refinancing via another route by the end of last year. While trading at 500 bps a year ago, the CDS collapse to just 100bps at the end of 2017. The widening was brutal and the CDS is back to 300bps. Meanwhile, the CDS and credit index markets were quiet with less activity reported than usual.