Worldline - comment

Oh well. We are staying short the Worldine ‘27s today, a position we entered at 86.5c/€ early last month. Clearly, we should have closed out 10 points ago, but without a capital increase, Worldline would have struggled to convince us of an orderly refinancing in 2027. For the capital markets day today, the board has approved a two-tier capital increase, raising €110m at a 25% premium to be subscribed by Bpifrance, Crédit Agricole SA and BNP Paribas. This would be followed by a €390m rights issue at approx. €1.35 p.s., backstopped by the same investors. Trading around €92c/€ this morning or 390 bps over, we don’t think the 0.875 coupon bonds will immediately grind much tighter. So perhaps the bid cools off in the coming days, as we will be closing this position in the foreseeable future. The additional cash should allow Worldline to refinance/pay down the short end.