OHLA - comment
After the successful settlement of the Cemenosa litigation, OHLA is allocating some of the cash to buy back bonds and repay debt. We will be taking the cash as a counterweight to the recent underperformance in the equity but will be considering reinvesting within OHLA. The fall in the equity is excessive (down from €1.10 to €0.85 since the beginning of the year), and with a yield of over 9%, the bonds are still good value compared to alternatives. OHLA is tendering for 8.8% of the nominal outstanding bonds, giving a blended price of 95.4c/€ c1% above the current bid. At 100.3% (including accrued interest), the tender price represents around 1.65c/€ for bonds (currently 94.75/96.125). If the tender is not filled OHLA will call bonds at par, pro-rata. The tender will be popular, and will probably be filled, avoiding the pro-rata call. However, we will take something off the table whilst retaining the equity. The tender expires on 7th March 22. We are currently updating our OHLA model and will publish this imminently.