Here’s What to Watch in European High-Yield Bonds This Week

By Laura Benitez
(Bloomberg) — The Very Group, owned by the billionaire
Barclay family, is planning to raise 575 million pounds ($792
million) to refinance its outstanding debt this week, just days
after its parent Shop Direct Holdings Ltd. cut its exposure to
defunct lender Greensill Capital.
The firm, one of the U.K.’s largest online retailers,
briefed investors on Monday about its plans to replace existing
bonds with five-year senior secured notes. The planned deal,
rated B3/B-, is currently being marketed in the mid-6% yield
The Very Group and Shop Direct cut remaining exposure to
Greensill Capital earlier this month by repaying a $200 million
loan which will go toward reimbursing investors in Credit Suisse
Group AG funds.
Elsewhere, PeopleCert Wisdom, a provider of professional
certification services, is marketing a debut 300 million-euro
($354 million) senior secured five-year bond. The proceeds will
be used to repay a bridge facility, which will partly finance
the acquisition of Axelos, as well as repay existing debt. The
firm held an investor call Monday.

Sweeten Terms

Meanwhile, investors will watch to see how Ideal Standard’s
bond trades in the secondary market this week after the sanitary
fixtures maker had to sweeten the terms and downsize the deal on
Friday. The deal priced higher than initial price talk at 6.625%
yield, an unusual move for a new European junk bond this year in
a market that’s generally been favorable to borrowers.
The firm, which agreed to a debt exchange with its largest
bondholder Anchorage Capital Group in 2014, will use the new
debt to refinance existing bonds and redeem subordinated
obligations held by the issuer’s shareholders.
In a note published Monday, analysts at Spread Research
said they remained cautious on the company’s already weak cash
generation and significantly higher leverage and recommended
clients sell their exposure.
In leveraged loan markets, about 10 transactions are on
offer, even as the list of primary deals shortens ahead of the
August break. Meetings take place today for the financing to
back CD&R’s take-private of UDG Healthcare Plc, and a
refinancing and M&A add-on deal for Waterlogic Ltd — both with
August deadlines in early August.