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Intrum Explores €500M Plus New Money Options

Swedish debt collector Intrum is in discussions with both its existing bondholders and third party investors about the provision of new money, sources close told Reorg. The company is looking for more than €500 million, the sources said.

The exact size of the potential new money will depend on the structure of the deal and the terms of the new facility, the sources added.

A restructuring proposal from the front-end bondholder group, which is advised by Lazard and Weil, Gotshal & Manges, envisaged €500 million of new money paying 7% cash/5% PIK, the majority of which would be used to pay down part of the RCF, as reported. The rest of the new money would be available to the company and could be used – alongside cash on balance sheet, given that under the plan the 2024 notes would not be repaid at maturity in mid-July – to fund a voluntary tender offer for the long-dated bonds at a discount. The long-dated bonds not submitted in the tender offer would remain outstanding while the front-end bonds would be elevated into new secured paper sitting on top of the reduced and extended RCF.

The majority crossholder group’s original plan did not feature any new money injection but the group was open to providing it if the company required it, as reported.

The two investor groups are considering revisiting their plans after the company provided them with feedback on their original proposals. On the one hand, the new money envisaged in the front end proposal was deemed very expensive and the plan would fail to address the full maturity wall should the long-dated investors opt not to tender. On the other hand, the increased coupon contemplated in the majority bondholder proposal would burden the company with hefty interest while bringing limited deleveraging given that no haircut was entailed and all bonds, with the exception of a portion of the short-dated bonds set to be repaid at par using proceeds from the portfolio disposal to Cerberus and cash on balance sheet, would be exchanged into a new bond with a 2028 maturity.

Advisors to the group have been given access to the data room to help revise the plans, according to the sources.

Following active trades in the bonds, there’s been some reshuffling in the groups’ composition as a few funds including King Street and Arini, previously part or in contact with the majority bondholder group, recently shifted camps or are considering changing strategy, as reported.

The front-end ad hoc group currently includes about 60% of the 2024 notes and well over 25% of the 2025 notes, and is in contact with further investors, bringing the total to about 75% and 40%, respectively, while the majority bondholder group represents over 52% of Intrum’s bonds across the capital stack, including material holdings in the short-dated bonds and majority holdings in the long-dated bonds.

The 2024 notes have recently rallied and are now as high as the mid-90s on expectation that Intrum will ultimately repay them at maturity in mid-July if it does not opt for the front-end group proposal.

Intrum’s management had said on a March 25 call that the repayment of the 2024 and 2025 notes was not the baseline plan as it would leave the company little cash to run the business, despite noting the group had sufficient liquidity to cover about 93% of the combined 2024 and 2025 maturities. But as the clock is ticking towards the mid-July maturity and the company is running short of time to implement a scheme of arrangement in the event it falls short of the required consent from the 2024 investors for a restructuring plan, the chances of a repayment are increasing, given that the 2024 bond is fairly small at about €469 million compared to the 2025 issue, which amounts to about €803 million.

Intrum
03/31/2024
EBITDA Multiple
(SEK in Millions)
Amount
Price
Mkt. Val.
US$ Amt.
US$ Mkt. Val.
Maturity
Rate
Yield
Book
Market
NOK 1.103B Revolving Credit Facility 1
1,103.0
1,103.0
105.1
105.1
Jan-15-2026
SEK 11.879B Revolving Credit Facility 1
11,879.0
11,879.0
1,132.4
1,132.4
Jan-15-2026
€145M Revolving Credit Facility 1
1,671.0
1,671.0
159.3
159.3
Jan-15-2026
SEK 2Bn Backstop Revolving Credit Facility
Jan-15-2026
Total Super Senior Debt
14,653.0
14,653.0
1,396.9
1,396.9
1.1x
1.1x
€50M Senior Secured Private Placement Notes due 2024
576.0
576.0
54.9
54.9
Jun-22-2024
Reference Rate + 7.170%
€100M Senior Secured Term Loan due 2025
1,152.0
1,152.0
109.8
109.8
Nov-14-2025
EURIBOR + 8.570%
Total Senior Secured Debt
1,728.0
1,728.0
164.7
164.7
1.3x
1.3x
€469M Senior Notes due 2024 2
5,405.0
5,405.0
515.3
515.3
Jul-15-2024
3.130%
SEK 1.5B Senior Notes FR MTNs due 2024
1,500.0
1,500.0
143.0
143.0
Oct-01-2024
STIBOR + 6.600%
€75M Senior Notes Private Placement due 2025
864.0
864.0
82.4
82.4
Mar-15-2025
3.000%
SEK1.1B Senior FR MTN due 2025
1,100.0
1,100.0
104.9
104.9
Jul-2025
STIBOR + 12.050%
SEK 400M Senior MTN due 2025
400.0
400.0
38.1
38.1
Jul-2025
11.875%
€803M Senior Notes due 2025
9,253.0
9,253.0
882.1
882.1
Aug-15-2025
4.880%
SEK 1.25B Notes MTNs due 2025
1,250.0
1,250.0
119.2
119.2
Sep-12-2025
STIBOR + 8.640%
€800M Senior Notes due 2026
9,220.0
9,220.0
878.9
878.9
Jul-15-2026
3.500%
SEK 1B Senior Notes MTNs due 2026
1,000.0
1,000.0
95.3
95.3
Sep-09-2026
STIBOR + 7.350%
€828M Senior Notes due 2027
9,547.0
9,547.0
910.1
910.1
Sep-15-2027
3.000%
€450M Senior Notes due 2028
5,186.0
5,186.0
494.4
494.4
Mar-15-2028
9.250%
€15M Commercial Paper
173.0
173.0
16.5
16.5
5.330%
SEK 265M Commercial Paper
265.0
265.0
25.3
25.3
5.650%
Total Unsecured Debt
45,163.0
45,163.0
4,305.3
4,305.3
4.7x
4.7x
Lease Liabilities
649.0
649.0
61.9
61.9
Total Lease Liabilities
649.0
649.0
61.9
61.9
4.8x
4.8x
Total Debt
62,193.0
62,193.0
5,928.8
5,928.8
4.8x
4.8x
Less: Cash and Equivalents
(4,605.0)
(4,605.0)
(439.0)
(439.0)
Net Debt
57,588.0
57,588.0
5,489.8
5,489.8
4.4x
4.4x
Plus: Market Capitalization
2,620.0
2,620.0
249.8
249.8
Enterprise Value
60,208.0
60,208.0
5,739.6
5,739.6
4.6x
4.6x
Operating Metrics
US$ Amt.
LTM Revenue
20,368.0
1,941.7
LTM Reported EBITDA
12,975.0
1,236.9
Liquidity
RCF Commitments
19,048.0
1,815.8
Less: Drawn
(14,653.0)
(1,396.9)
Plus: Cash and Equivalents
4,605.0
439.0
Total Liquidity
9,000.0
858.0
Credit Metrics
Gross Leverage
4.8x
Net Leverage
4.4x
Notes:
The capital structure is on a post-IFRS 16 basis. LTM reported EBITDA refers to the cash EBITDA as reported by the company. Reorg calculated RCF commitments as drawn amount plus estimated liquidity. Market cap as of April 24 2024.
1. Part of €1.8 billion RCF
2. Originally €900M outstanding
US$ Translation: SEK/USD rate used for USD conversion is 10.49.