Antolin - comment

The deal communicated yesterday is more comprehensive than last week’s press rumours suggested. As predicted, the banks have harmonised terms and have consented to receiving two alternatives, one of which includes providing fresh money. That effectively elevates their class and gives the family control over the process - continued control over the company - in full, actually. Bondholders don’t seem to have been part of the deal, but as we wrote in our Game Theory, it’s structured so that the ‘30s would vote in favour. Both bonds get the choice between a term out to 2035 or a haircut to 2030 at more attractive economics. That’s a chance for the '30s to improve their ranking vs. the ‘28s above their current trading value, which may entice the 28s to take the haircut too. So it’s largely as anticipated, except that the structure leaves a surprising cash interest burden on the company instead of promising more PIK. In the absence of any equity story, maybe the family had to pay that price to stay in full control.