Emeria - comment

Reports that Emeria lenders are forming a coop mark a deterioration in expectations. The debt may be difficult for the company to carry, but is EV covered. If shareholders can’t agree between themselves to put in the money or raise senior equity in a bid to A&E the debt, then uncomfortable as they may find Sauvegarde, creditors have a viable path to full recovery, and the sombre alternative unites loans and bonds (approx 1/4) in one hypothetical class. A coop agreement should therefore keep Partners Group (currently gating funds and therefore probably struggling for fresh cash) and TA associates honest and is designed to keep them focused on discussions between themselves.