Mobico - comment

Not so fast. So CMC already hold over half the Perps. Well played. To pass an extraordinary resolution, the trust deed requires 75%, so they'll need half of the remainder to agree to their plan, which could involve some subordination of their own paper. Otherwise, today's announcement is unambiguous. AdL explicitly acknowledges that the change of control events will occur under the existing senior debt, i.e. the '28s, the PPs and the '31s - all individually named. Note that the Perps are not on that list; their fate is kept ominously vague. The language is that the sr. debt "will ultimately be refinanced following the expected occurrence of change of control events thereunder." There is no waiver request, no consent solicitation, no condition requiring bondholder cooperation. AdL has already signed an Interim Facilities Agreement to fund the whole takeout. Clearly, we should have/would have/could have gone long, instead of just buying back our short. But at least we did it very timely. The new debt structure is not disclosed; Santander is advising BidCo. The senior debt is worth par.

Coming back to the Perps, all looks pretty here. But there is some danger that CMC has a pre-agreed deal that leaves the Perps with very unfavourable economics, depending on any cross holdings of the other 25% that would vote in favour with them.