What will Lowell look like after the recapitalisation and how will that new capital structure befit its needs? Having unwound its Balance Sheet Velocity actions from past financials, we base our model on the clean operating performance of its collection engine which remains undiminished, unlike the ERC book. As usual, we make some modifications to the way debt collectors have to report their financials and in conjunction with the collection engine and the ERC book, we arrive at conclusions that we had not expected to this degree. As a result, our expectations are set quite firmly, but we’ll wait for the new bonds to be issued before we put on the trade.

The environment for Real Estate is changing. A more detailed comparison of our UK and German valuations to those of the company provides us with new insights into the respective portfolios and the dynamics currently at work. Using both these conclusions, we have appraised the capital structure and have ultimately taken a new position.

We successfully traded Cerba earlier this year and have revisited the name following the Q4 results with a focus on refining forecasts and identifying future trading opportunities. Expectations for the French laboratory segment have changed in light of the new tariff regime and our attention was focused on the research division, particularly the potential implications of U.S. policy changes. These factors collectively inform the view on the company’s upcoming liquidity needs and the strategic options available.

Having revisited Amara some 20 points lower, our analysis points towards a particularly strong dichotomy of value vs. dynamic. We have analysed its markets and the company’s likely development within those, which tells a different story from the more static calculations of DCF and debt-carrying capacity. As a result, we have changed our view of the name, but are still refraining from taking a position.

Having observed the widening in the Modulaire cap stack, we forecast where we expect cash flows to be over the next two years, what additional challenges may emerge and how this should inform our investment stance. Having modelled the fleet and forecast by segment, we have identified what deviance from our expectations for Q125 may alter our view of this opportunity. We will be holding:

Modulaire Live Discussion on Thursday, 9th May at 3 PM UK | 10 AM EST.

For more information, please contact info@sarria.co.uk.

Naturally, the euphoria over European government contracts creates an interesting dynamic for SES’ bonds and Hybridds. We have sharpened our forecast for this and the next years on the basis of some of the information released earlier this week, which confirms our previous stance on these instruments. Our pro-forma combined model informs us on expected refinancing dynamics in the medium term on the basis of certain shifts and soft triggers this year and next.

We previously stated that AMS Osram’s equity and credit stories are bifurcating. The acknowledgement that asset sales are required is a shift towards credit investors' concerns. We have examined the downside scenario in greater detail, focusing on the potential refinancing and the level of interest coverage under various growth scenarios. We have built on our previous work, enabling us to flex assumptions, resulting in varying interest coverage levels. Our analysis results in a minimum asset sales level required in order to refinance if top-line growth does not materialise. In that context, we calculate through the potential refinancing of the RCF and 2027 Convertible bonds which opens opportunities at the current bond price.

While the bear is loose, hunting for tariff bargains (that includes us), some names and sectors are receiving little investor attention. Following the latest cash injection, we have substantially rewritten our Investment Memo. For all the moving parts concering UK retail and Matalan in particular, the story has become very simple and having analysed the situation from various perspectives, we have come to a strong conclusion, prompting us to adjust our position significantly.

We have assessed upcoming maturities and how Branicks can meet them. In light of the current real estate market, we have updated our valuation of the SUNs and how that should impact our investment stance. Branicks will need to approach the SUN holders by Q3 2025, so we considered the options for creditors and the company and how this should impact our investment stance.

So the bonds are 10 points cheaper - along with many others. Having fully overhauled our analysis of the name, we have come to change our view and have accordingly reversed our positioning in the bonds. We observe the nature of the business, back-test cost assumptions and consider scenarios that inform a shadow investment decision ahead of upcoming results.

We published on AMS Osram post its Q4 numbers in February, and subsequently updated our model and our positioning in mid-March. We have built on this work answering some additional questions raised since the equity and credit market correction. We have refocused on our analysis on the cash flow and the potential timings of refinancing of upcoming maturities. The story diverges between the credit and equity outlook which creates some interesting trading opportunities.

After the publication of its FY24 numbers, we have reassessed Rekeep and its newly issued bond. We have built on our previous work, focusing our attention on the changes to the protections offered to bondholders versus the previous deal. We evaluate the perceived market view on the potential for an asset sale reasoning through the options available to the Company. We have extended our model calculating our expectations for Free Cash flow, a perennial concern for this credit. All combined has led us to positioning ourselves in the name, taking into account the yields now on offer on other names in the current environment.

We are covering our short position taken in February across the capital structure. Our view remains based on our analysis of fee levels versus volume expectations for FY25, but remain conscious of shareholder motivation. Recent market movements have presented us with a trading opportunity, but we will remain vigilant on the name in the coming weeks.

We have re-evaluated our analysis of Kem One to take into account the new Super Senior Facility and revisit our previous work on future capital expenditure to arrive at a new cashflow projection after accounting for the myriad of non-recurring add-backs Kem One incurred in FY24. We compare the Company’s projections against our model, contrasting the assumptions underlying the forecast, some of which are safer than others. As a result our view has changed only slightly, but we are close to altering our positioning in the name.

Following the recent market euphoria over European defence spending, we have sharpened our pencils. In some segments, the combined company did not perform (pro forma) to model and in others, we are identifying areas that merit further work. To account for current geopolitics, we are flexing our assumptions and are gauging what assumptions are required and how easily the company can meet those targets. Overall, we have therefore arrived at a strategy for this year and when we are looking to have certain information that will inform us on the timing of our execution.

We will be holding Aston Martin Live Discussion on Wednesday, 9th April at 3 PM UK | 10 AM EST. For more information, please contact info@sarria.co.uk. Aston Martin (AML) SSNs are trading around 12.5% so we have resumed coverage. We have revisited our volume projections and revised our cash flow projections to advise our investment stance. We have also assessed the potential impact of tariffs from the US and other shorter-term effects and how we might adjust our posture to take advantage.

The HSE24 story has played out as we expected, albeit faster. We have seen the bonds rise closer to our valuation and we still see the bonds rising to that level over time. We assess the proposal from management, how we value the various components to guide our investment stance, and what changes we may want to make. We evaluate the timing of the deal, the possibility of success and how long it will take to deliver the bond fair value.

We will be holding Stonegate Live Discussion on Thursday, 3rd April at 3 PM UK | 10 AM EST. For more information, please contact info@sarria.co.uk.

We are doing the unpopular thing and are weighing what we’ve observed so far against the promises that were made for the refinancing. In doing so, we are mindful of the likely timing of the implementation of the measures, but it does provide us with useful background on which to form our expectations for 2025. Coupled with a re-build of our so far very successful model, we are basing our decision on a mix of collateral, legal structure, cashflows and the trends we are expecting for each format.

We have further adjusted our position post the Q4 numbers, building on our previous analysis. The Company continues to perform slightly better than our model, confirming our view of stability returning to the Grand City Properties and the sector in general. The stability of the operational data enables us to examine in greater detail the options available to the Company to drive additional shareholder value. Analysing these options, and the probability of execution has informed our investment thesis, enabling us to reposition our exposure to Grand City Properties.

We have re-evaluated our positioning following the publication of AroundTown’s Q4 and FY24 numbers. That AroundTown has launched a separate fund to take advantage of any dislocation in the real estate market is an acknowledgement of the issues and priorities at AroundTown. We model the impact of this approach and its effect on ArooundTown's ultimate aim of a rating upgrade. Operationally, AroundTown remains stable, allowing easy extension of our model. We have chosen to spend more effort on potential strategic decisions available to the Company to drive alpha return. Combining all of this work, we have adjusted our positioning.