Intrum - comment

Only days after the S&P downgrade triggered a sell-off of its shares and bonds, Intrum management looked reasonably prepared and launched a bond tender via unmodified Dutch auction of up to €50m. Having bought our 28s only a day before the announcement and 1.75 points higher than the minimum purchase price, we feel inclined to tender uncompetitively and likely rebuild the position after the transaction, as we don’t see the bonds trade up further at this stage. Given the recent drop we expect a high max. purchase, but a low scale factor. 

That the 24s are not included in the tender removes the final uncertainties about liability management ahead of the summer. But given the generally tight liquidity into 2025, we wonder if the acceptance results will hint at any shift in management thinking thereafter.