Ei Group’s secured bondholders face forced redemption at par

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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