Thomas Cook bank debt trading

All,

In light of a TCG lender selling a significant strip of Super Sr. Loan, RCF and LC, we have spent some time with counsel and advisors this morning on how we see this play out.

The above offer around 50p/£ sends a number of signals:

- The season may not be going well and the banks may have been updated on that

- There may be more cash required than just £300m

- The banks may be concerned that bonds have higher than assumed nuisance value - even if unsecured in a pre-pack administration - due to the retail nature of the business

- The banks may be concerned about reputational damage 

- The buyer may well be a fund with far less concern for reputational damage and the heat is about to be turned up on the bonds and more bank debt may trade soon

- Bondholders should start organising to ensure a smooth pre-pack with the banks

We continue to be very sceptical of the airline sale and any associated chances of escaping a restructuring post September in which the bonds will have to sit mostly behind the bank debt. 

Wolfgang