Nidda - comment

Nidda’s liability management exercise announced yesterday should significantly reduce its 2024 maturities leaving just €400m of SUNs in 2025 to refinance (if no SUNs are tendered). Nidda is not waiting and hoping that the high-yield market returns to robust health anytime soon. Instead, it is paying up to remain in charge of its own destiny. Refinance like this isn’t available to everyone, but with €400m in cash on hand and a €400m undrawn RCF Nidda's liquidity will be sufficient even if high-yield coupons remain elevated for longer than expected. This lack of confidence in the medium-term outlook for high yield bears nothing for all of us.

 - In October Stada/Nidda exchanged €1.4bn of its 3.5% 2024 for 7.5% 2026 bonds. Nidda paid 8 points to holders who were willing to exchange. The bond price before the exchange offer was around 90c/€ => 98c/€ with the cash payment. The exchange offer shifted a significant portion of its liabilities out by 2 years. 

- Today the company has fired a second salvo in its refinancing operation. The Unmodified Dutch Auction looks to us to be targeting the remaining c€500m of 3.5% 2024 notes outstanding. The tender is for €250m but could rise. The minimum purchase price of 98c/€ is in line with what was paid to other investors. The company has included the 2025 SUNs but with lower purchase prices. 

- Nidda has secured commitments for up to €500m of new 7-year Senior Secured FRNs which will effectively finance the offer to purchase.