Eroski : Issuance Focus

Eroski is planning to issue € 500m in senior secured notes due 2031 (5.5 years) with a two-year non-callable period. The bond will be secured by 87% of Forum Sport's share capital, 50% of Vegalsa and Supratuc's share capital, as well as by the shares of guarantor companies and 60% Aportaciones Financieras Eroski's share capital (issuers of perpetual bonds). Note that the guarantor companies do not include Vegalsa and Supratuc (which account for 50% of the group's EBITDA).
The documentation is similar to that of the previous bond, but a 103% call option on 10% of the bond's nominal amount per calendar year prior to the first call date has been added. The restricted payment covenant allows for any dividend payment if the leverage ratio excluding IFRS 16 is less than 2x pro forma. It also includes a builder basket starting in November 2023 (50% of cumulative net earnings and 100% of losses with a zero floor) and a general basket of € 100.5m or 30% of EBITDA.