Report
Anne-Barbara Nicco

Flos B&B Italia (ex-IDG) : Exercise of 103% call and coverage initiation on new 2029 FRN

Flos B&B Italia has successfully priced its new FRN 5NC1 with a € 80m upsize to € 550m. The surplus cash will be allocated to the exercise of the 10% call at 103% on the SSN due15/11/28 (and for general corporate purposes), a scenario that we had considered likely (see our report of 27 November) but which had not been announced in the first place. The group undoubtedly benefited from solid demand for its new bond offering and from a decent cost, with final pricing at EUR+387.5bp vs. a price talk at EUR+400bp (+/- 12.5bp) and an IPT at EUR+400-425bp. This is below our fair price estimate (EUR+450bp) however. We initiate coverage on the bond with a Neutral recommendation and maintain it at Neutral on the 2028 SSN for which a second call option at 103% on 10% of the initial amount is exercisable in 2025. In this case, a double call at 103% would reduce the YTW to 4.7% (vs. 6% ask currently without any call at 103%), see our analysis on next page.
Provider
Oddo BHF
Oddo BHF

​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.

Analysts
Anne-Barbara Nicco

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