Picard : New offering of senior unsecured notes

Picard is marketing the issuance of € 280m of 7NC3 senior unsecured notes (rated Caa1/CCC+), to be issued by the holding company FR Bondco, a shareholder of Picard Bondco, set to replace it.
Proceeds from the issue (€ 280m) and € 37m in cash on the balance sheet (€ 141m at end-June 2025) will be used to repay the Picard Bondco 5.5% 2027 SUN (€ 310m) via a tender offer at a price of 100.20%, i.e. a premium of 20 cents over the call price on 1 January 2026 (par).
Alongside this, Lion Capital's € 129m vendor loan will be partially refinanced by ICG to the tune of € 80m via PIK convertible bonds while discussions are under way to bring in a long-term minority shareholder.
There is some good news accompanying the transaction: S&P raised its outlook to stable vs. negative on the group's 'B' rating, despite the lack of deleveraging over the past year, to reflect Picard’s stable operating performance in a challenging consumer environment.
In an unstable political climate in France, we note that the timing of the issue comes just before the critical end-of-year period. (i.e. the two months that generate free cash flow and allow for a deleveraging).
In this report, we provide an overview of the group's credit profile and estimate the pricing of the new issue, while updating our recommendations on existing bonds.