Atalian - comments

The completion of the sale of US assets to GDI offers an exit from Atalian's issues in the US unit but makes little difference to cash. As we commented recently, the delays in publishing the Strategic Plan and the departure of CEO Pellegrini after only a few months point to difficulties in producing a credible business plan. In our recent client email, we looked at the possible results of Atalian ploughing on with refinancing the 2024 notes at par and trying to deal with the 2025 holders separately. Atalian could push 2025 holders into a refinance by threatening a forced extension via a Sauvegarde progress. Another stick is the layering potential from the senior secured carve out. Layering the bonds with up to €245m of senior secured bank debt would weaken the bondholder's position in the debt stack. Something has to give.