Merlin bonds enchant investors despite toothless covenants

By Karoliina Liimatainen
17 Oct 2019

Investors have piled into bonds to fund the buyout of UK theme park operator Merlin, despite the covenants on the unsecured debt being considered the worst ever. Meanwhile, the “net short” provision, designed to curb CDS investors, looks to have made it to the final documentation for the first time in a European deal.

The €370m senior notes due 2027 were priced at 4.5% and the $410m senior notes at 6.625% on Wednesday evening. Considering that the bonds are not coming with any security, the pricing for B-/B3 rated bonds was exceptionally tight.

Neither bond can be called for three years.

Deutsche Bank, ...

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