We have taken a position in ION Platform following recent discussions with you that prompted a renewed focus on the credit. We relistened to the mammoth Q1 conference call and tested management’s assertions against our updated model, with particular focus on dividends, bond buybacks, and the impact of AI. The latest move sharpens the opportunity we outlined previously and clarifies our preferred positioning as the credit evolves.
Recent developments at Transcom have prompted a change in our investment decision. The Amend and Extend, subsequent operating results, and sponsor capital injection materially altered the capital structure and reset the balance of risk and optionality. Our work focuses on how sponsor incentives and coupon mechanics interact with operating performance and cash flow generation, set against downside scenarios anchored in interest coverage, debt ranking, and recovery values. We benchmark peer valuation and scenario outcomes to determine where relative value now sits as the credit evolves.
Following Q126 results, we have extended our model to Dec. ‘29 and have played with assumptions in search for a reason to change our investment stance in either direction. However, as per our conference call last week, it is too early for our thesis and we will rather be disciplined about this one.
We have changed our positioning in Flora Food Group, following a detailed refresh of our work after the Q1 results. In doing so, we look through sponsor exit speculation and focus instead on the durability of the underlying credit, the interaction between liquidity, restructuring costs and deleveraging, and relative value across the capital structure. We have also deepened our analysis of volume and pricing trends across geographies alongside the trajectory of restructuring spend to support a more informed assessment of risk and opportunity as the credit evolves.
Having discussed LME mechanics with Hogan Lovells, we decided to update our analysis of the credit, integrating some of the new thinking with the latest revenue, inventory and financial developments at the company. Our investment stance has not immediately changed, but we feel more assured in our posture and future strategy in the name.
The Portugal and Dominican Republic “drop down” has materially reshaped the credit landscape. To arrive at our investment decision, we focus on how this structural shift frames potential outcomes. The range of liability management options available, and the way value may eventually flow through the capital structure has triggered a change of strategy at our end. We integrate a deeper legal analysis, specifically weighted to the LME mechanics, valuation work and recapitalisation scenarios to determine where risk and optionality now reside, recognising that outcomes have long been driven by creditor alignment and structural positioning rather than underlying operating performance.
Some of you were asking about Travelodge and if we had an opinion on it, given some of the near term scenarios. Having analysed the business and modelled the potential developments, we conclude it is rather a question of timing than a situation we wish to position ourselves in either way right now.
The pandemic, online migration, tariffs, AI and oil prices all have one thing in common: They impact House of HR. Staffing companies are notoriously pro-cyclical, and the listed peers only document how quickly volumes and prices can move in unison against investors. So, adjusting for acquisitios, how have these factors affected the company so far and what can we infer from that on how its segments will evolve from here? We distill what management needs to get right in the next quarters to achieve that refinancing and how likely that is. So it is on that basis that we maintain our investment stance.
Following sustained client interest ahead of the upcoming Q1 results, we have re-engaged with Pasubio, refreshing our model and the evolving credit profile. Our investment decision centres on three core areas: the financial and structural implications of recent and pending acquisitions, the treatment and credibility of pro-forma EBITDA adjustments, and the group’s strategic diversification into luxury fashion alongside its legacy automotive exposure. We assess how acquisition funding structures, minority equity rollovers, and sponsor involvement influence leverage and financial flexibility, while examining whether the growing fashion segment can support a more resilient earnings profile over time.
With a distressed debt sponsor and an A&E and a drop-down behind it, Pfleiderer is easy to pass over. But there are reasons for this development, and this kind of volatility holds opportunities. Ahead of what could be a cleansing Q425 call, we have dug through the documents, reasoned through the LME, reasoned through the next LME, reasoned through the next restructuring and through how the bonds should be trading throughout the next two years on the basis of our so far quite well tracking models for Silekol and EWP. Pending clarity on a few “details”, we are ready.
We built the FY 25 results into our model and assessed the impact of the amended deal with the lending banks to advise us on our positioning in the cap stack. We consider the impact of the current situation in the Gulf, how this impacts our forecasts and whether we should adjust our longer-term view on what Synthomer does next.
Following the release of Q1 2026 results and sustained investor interest, we have refreshed our model and revisited ION Platform in detail. We re-listened to the extended Q1 call with a focus on three areas central to the credit debate: cash distributions to the Group, the visibility and credibility of future cost savings, and the practical implications of AI. While AI dominates the market narrative, our work equally incorporates the mechanics of integration, synergy execution, and the resulting cash deleveraging potential. We balance these assessments versus the current yield and market sentiment, which drives us to our investment decision.
Having altered our approach to valuing SBB, we have also revisited our assessment of the value of the underlying assets to identify opportunities within the Cap Stack. We find the potential upsides and downsides in the valuation and the drivers of those changes in the context of management's options for short and medium-term maturities, what levers they can use and what the timing is expected to be.
Prompted by questions raised during our recent credit call, we have revisited our analysis of ION Platform’s ability to upstream cash to its parent, ION Group. Building on our prior covenant and legal work, we have expanded our assessment using the limited disclosure available on ION Group’s debt structure, ahead of the forthcoming Q1 results. This note clarifies the extent to which dividend capacity exists under the bond documentation and the implications for deleveraging assumptions at the ION Platform level. While this has an effect on our view of the situation, it does not ultimately change our positioning today.
Negotiations are commencing under a mandat ad hoc at Cerba, marking a constructive step forward in the restructuring process. While the complexity of the broader stakeholder landscape and ongoing discussions around the future French regulatory pricing regime may extend the timeline, these factors are integral to shaping a sustainable outcome. Our investment decision reflects this evolving backdrop, and the anticipated need for fresh capital and a comprehensive balance-sheet reset continues to underpin a potential investment opportunity.
We have built the FY 2025 results into our model to update our investment stance. We look at the development of Subscribers and ARPU over the next three years in the context of how operating cash flow will evolve. Our analysis takes into account the capex plans and the attitude of shareholders to the distribution of capital.
SES these days is clearly more about spread risk than default, but with as many layers and the sheer volume of bonds, it’s worth investigating the gap between expectations more closely. Our pre-transaction consolidation shines an interesting light on the company today and we feel we are closer to taking a position than we have been since March last year.
Our shadow position in the Morrisons cap stack has performed well, so having assessed current pricing, we are changing our investment stance. We have built the recently published results into our model. In addition to considering the overall UK grocery market, we have built in recent trading to test our forecasts for revenue and cash flow over the period to FYE28. Our evaluation identifies the levers the company has in terms of medium-term maturities and where cash could be raised if the market were to deteriorate further.
With the bonds now trading towards par following the Q4 numbers, we have revisited our analysis of BioGroup, shifting the focus away from near-term performance and toward the implications for the capital structure as maturities come into view. As pricing approaches a key inflection point, our work centres on how a refinancing could take shape in late 2026 or FY27. We examine the interaction between free cash flow, embedded cost assumptions, and a materially higher future cost of debt, and assess the reliance on “leverageable EBITDA” adjustments in framing credit metrics. Taken together, this work has prompted a reassessment of positioning as the company enters a pivotal period.
Rapid shifts in technology narratives continue to dominate sentiment across software and data credits, often obscuring more immediate structural drivers of credit risk. As a result of recent trading levels, we have initiated work on ION Platform, looking for an investment opportunity. To assess the trade, we consider the implications of AI disruption alongside a detailed assessment of consolidation mechanics, synergy delivery, and cash generation across the combined business. We combe through reported adjustments to assess underlying leverage, debt capacity, and execution risk as the platform integrates three distinct businesses under a single capital structure.