VMO2: Calculating The Downside - Model Update - POSITIONING

VMO2’s 15–20 point bond sell-off has created an opportunity, but how much downside are we taking at current levels? We have rebuilt our downside scenarios around two key risks: failure of the Nexfibre/Netomnia transaction and withdrawal of Vendor Financing. While this is not our base case, we have quantified the resulting funding gap, assessed how it would need to be funded and calculated debt capacity in a hard restructuring, mapping recoveries across each creditor class. Combined with our previous work on the underlying credit, this gives us a clearer view of the downside at current prices and the conviction to make an investment decision.