Ei Group’s secured bondholders face forced redemption at par

Beer
By Karoliina Liimatainen
23 Jul 2019

An acquisition of British pub giant Ei Group by its smaller competitor Stonegate is about to trigger a clause that allows Ei Group to redeem £1bn of its senior secured bonds at par. Secured bondholders will likely have to swallow a pint of bitter if the sponsor behind the deal does not budge.

A rare change of control provision on this model is a relic that dates at least 19 years, to the days when the pub company still held an investment grade rating, according to Covenant Review, a credit research company. 

It only triggers if the bonds are rated below investment ...

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