AMS Osram - comment

AMS Osram extended the RCF by 12 months to September 2027, which was well flagged by the Company. In addition, the Company reiterated its deleveraging plans, including the potential for asset sales that could generate over €500 million. The plan aims to reduce leverage below 2.0x and to reduce interest expense below €100m. 

The convertible and high-yield have both rallied in recent weeks, which raises the question of when to exit our long position. The convertible is now trading at c. 95%, which is very tight, with some potential upside if asset sales occur. The 2029 bonds at 106% still offer a decent yield of 8.6%.