Elior : Adopting Neutral recommendation on newly issued 2030 notes
Elior has completed its € 500m bond issue due March 2030, which will be used to refinance the 2026 notes. The price-talk started at 6.25-6.5%, but demand must have been high because the guidance was revised downwards several times (6-6.25%, then 5.875% +/-0.125% and 5.625-5.75%). In the end, the notes were issued at 5.625%, equating to a spread of around 315bp.We initiate coverage of the new bonds with a Neutral recommendation. We had hoped for a slightly higher issue premium, but the final yield is still slightly better than what is currently being offered on the secondary market for its peers (average YTW of around 5% and spread of ~280bp).
The 2026 notes, on which we were Buyer, are expected to be repaid very soon. The issuer has launched an early redemption offer at par. It is open until the end of the week, with redemption scheduled for 5 February. In addition, these notes are callable at 100.938%, but the price will drop to 100% on 15 July.
Elior is a contracted food and support services group based in France. Co. provides personalized catering and service solutions to 3.7 million customers in the business & industry, education, healthcare, leisure and travel markets through 17,500 restaurants and points of sale in 13 countries. Co. offer solutions in two core segments, Contract Catering & Support Services (provides foodservice solutions to Business & Industry, Education and Healthcare as well as support services for facilities management and cleaning services) and Concession Catering & Travel Retail (food service solutions for motorways, airports, railway stations and leisure).
Oddo Securities provides securities brokerage and research services. The company offers equity, economic, and derivatives research and credit analysis services. It focuses on insurance, automotive, building materials, pharmaceuticals, telecommunications, information technology, and agri-food industries.
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