Advanz Pharma : Advanz prices the new 2031 SSNs; we adopt a Buy recommendation

Advanz Pharma priced the new SSNs and changed eventually the sources a bit. It will increase the TLB add-on to EUR 165m from EUR 100m (OID at 99.5%). The euro bond remains at EUR 615m. The sterling bond was downsized to GBP 250m. Resulting in a tiny overfunding. Probably to balance the cash interest burden. The TLB will be subject to E+425bp. The euro bond reflects a yield of 7% and the sterling bond a high 9.125%. Maturity for all instruments is October 2031.
We adopt a Buy recommendation on the new 2031 SSNs. We terminate the Neutral recommendation on the existing 2028 SSNs, which will be redeemed shortly. The investment community is quite divided on the name. We see the chances/strengths compensating the risks/weaknesses. The euro bond yield at 7% is very attractive in our view, 100bp above our minimum requirement.