Bankinter: The company is to issue soon €1.3 billion in Guaranteed Bonds maturing in May 2023 with a coupon of 7.125%. Together with part of the cash (September: €644 million), it will be used to redeem close on €340 million of Senior Secured Bonds maturing in February 2025 with a coupon of 1.625% and to pay off the working capital loan facility maturing in November 2025. It also extends by 18 months and extends the current multi-currency working capital credit line until May 2027.
Opinion of Bankinter’s analysis team: Positive news, it was announced on Wednesday after the close of the Spanish stock market and the ADR rose +7.1% in New York. The refinancing reduces the stress of the debt maturities in 2025, is neutral in terms of leverage and the cost of the refinanced debt increases by +438 basis points. We estimate additional financial expenses of approximately €80 million (+13% vs. 2023).
S&P maintains its credit rating at speculative grade and upgrades it to B+ from B in view of the deleveraging (September 2024 6.0x EBITDA vs. 9.1x in September 2023) after selling 20% of Shanghai RAAS.
We maintain our unfavourable view in view of the still very high leverage. We believe the share price will take time to recover after the Brookfield fund’s takeover bid proposal was not accepted.
