Ei Group’s secured bondholders face forced redemption at par
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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