Haya - comment

Haya confirmed this morning that Sareb has not selected Haya as a service provider going forward and their contract will terminate in June 2022. This was the sole reason for us not investing in Haya (key contract risk). 

This termination does not impact the lock-up agreement and restructuring is likely to proceed. However, this contract loss probably explains the apparent more favourable terms bondholders received than anticipated.

Going forward, Haya are expected to downsize staffing levels to adjust for reduced AUMs. However, we note the profitability of the Sareb contract is reportedly lower than the remaining business. With a cash sweep mechanism on the restructured bonds, bondholders will benefit from the cash generative nature of Haya. However, equity value is likely to be minimal in the long run.