Travelodge - comment

We are not short these bonds because of the rich coupon that would burn a hole in our pocket. But unless the company can guide to strong occupancy over the summer, we are inclined to take a position after the call. Perhaps that means we should have already positioned ourselves ahead of time, since room for outperformance is limited on this name. We are concerned about a scenario in which the sponsor, now involved for rather a long time, could inject some fresh cash into Topco Finco and offer the net assets as a sweetener to consenting bondholders by February. Please refer to our July analysis for more detail.