Graanul - comment

Time is ticking. We are revisiting the name after receiving several questions about it. The bonds have been stuck in the mid-80s since April as doubts linger on a possible refinancing ahead of maturity in October 2026. With no sign of a refinancing, S&P have downgraded its bonds. S&P highlights the obvious credit concerns of Graanul relating to its largest customer, Drax (40%), which has not extended its contract beyond 2026. Driving this hiatus is the change in subsidy in the UK, which is likely to reduce demand for wood pellets.