“The company said it would raise guidance as it had fixed German operations but it didn’t raise guidance by quite as much as we thought. Perhaps it didn’t pull the whole rabbit out the hat, perhaps the UK problems sit deeper. There will be a an LME approach in 2H26 and we expect the whole capital structure will tackled all-in-one,” independent special situations desk Sarria told Debtwire.

“This name is on the cusp and could go either way. The concern is the path to a clean refi is narrow. The company has to grow and this isn't a company that can just turn a factory switch and churn out more cookies,” independent special situations desk Sarria told Debtwire. “The story of reduced costs and AI is believable but it’s an equity story, so it deserves equity pricing, and the bond yields ought to be wide. We like this but it needs to be nervously watched.”

Sarria noted there is no reason to believe any of the bonds are cheap to buy and the lack of free cashflow does not allow for a sensible DCF valuation of the company, adding that will make it difficult for stakeholders to agree on a valuation on which to restructure the balance sheet. Sarria added that Antolin has little debt capacity.

Independent special situations desk Sarria held a webinar on Tuesday (7 October) assessing legal risks and opportunities for the perpetual notes. The webinar included panellists Stephen Phillips from FreiLibertas, as well as Tom Astle and Alex Kay from Hogan Lovells.

While the firm’s net leverage remains high after the US school bus sale, Mobico has strong asset coverage and “its Spanish division alone would pay off the company’s debt,” Wolfgang Felix, founder of credit research firm Sarria, told investors on a call Wednesday.

Regarding the RCF, Felix said he doesn’t think it will be drawn to pay down bonds coming due, because “that just makes no sense this early in the game.”

n a wide-ranging Mobico webinar discussion, independent special situations desk Sarria noted Spanish ALSA operations were carrying the company with the UK franchising contract model shift being a margin rather than a revenue issue. While the German operations are suffering, the public focus on Deutsche Bahn’s half year earnings could help. Ultimately, Sarria noted Mobico is a GBP 1.8bn enterprise value business, albeit with debt carrying capacity covering only 83% of senior secured debt (gross), while a sale of ALSA could cover the entire debt stack. Perpetual noteholders could ask for cash to amend and extend and SUNs may accept some leakage if it addressed the perpetual note maturity problem, Sarria stated.