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UK Names Can Go Tighter

21 November 2018 by lberuti

December is fast approaching and the window to issue debt will soon close for corporates which have financing requirements. VUECIN (Vue International) decided to make the most of the last few days left in the current window to announce the issue of 7-year-facility, consisting of two tranches, one in Euro amounting roughly to €600mln and one in GBP amounting to £300mln. The proceeds of this term loan will be used to finance the acquisition of Cinestar and its new site capital expenditures, but also to refinance existing debt. VUECIN’s existing senior secured floating rate notes in Euro and senior secured notes in sterling will be entirely taken out. That means that only loans will be deliverable into CDS contracts going forward. So even though the leverage is expected to remain flat at 5.5x, VUECIN’s CDS was one of the standout performers among iTraxx Crossover constituents today. It closed 56bps tighter at 296bps. With this money coming back to £ bond holders, it could provide some relief to GBP HY which has been bidless for more than a week.