Vivion - comment
Vivion is leaning towards either raising debt or selling UK assets to fund the €180m outstanding 2024 notes. We think a debt raise is increasingly likely (modelled on the M&G deal from last year. In December 2023 there was €67m in cash at the Vivion Investments level, so €100m+ will be needed. The UK GAV is €2.1bn, and the debt is around €260m, giving an LTV of 12%. Vivion is seeking extensions to Golden’s bank lines, so it is incentivised to leave cash at this entity (€430m at FY23). Our central case is that the 2024s get taken out, helping the valuation of the 2028/29 notes.
The German portfolio has €188m of bank maturities in its Golden Portfolio over the rest of 2024, and Vivion is negotiating extensions for these facilities. Vivion already has a one-year extension on a €67m loan into Golden. Keeping cash at the Golden level will help with the bank negotiations in Germany.
We are staying long the bonds.