Thomas Cook Bonds ISE

[ChrisNix]

Anyone taken a look? Reportedly YTMs of 20% p.a. on 2022 bond. Listed in Ireland.

[Alaric]

Anyone taken a look?

If you Google for "thomas cook bonds", you find FT and other reports of investors selling them off amid concerns about the financing of the Company. The yield looks to be pricing in a material default risk.

[ChrisNix]

Alaric,

There is clearly a default risk, but this has less to do with the economics of the business than the poorly chosen capital structure, with the two substantial bond issues too close in maturity -- which means they may need to be addressed at the same juncture.

That said, the Company could certainly get a large rights issue away, and whilst that would be a blood bath for the ord holders it would see the bonds massively rerated.

Chris

[88V8]

Was going to look at these today then got distracted by a hedge. A real hedge and my fancy new hedgetrimmer.

The 2021 and the 2022 look worth a punt.
Anyone bought them through ii?

V8

[ChrisNix]

Meaning to have a look. A key element will be ranking in the debt pecking order. If TC survives, bonds will jump.

[Kr1ck]

Is there any analysis on these bonds? WShak seems to think equity is virtually worthless but bonds could be worth 3 times current value. I'm trying to find out if there is any debt above the 2021 & 2022 bonds.
As these bonds are listed in Ireland will they still be eligible for holding in a ISA/SIPP post Brexit? Or is that another unanswerable question?

[JamesMuenchen]

Is there any analysis on these bonds? WShak seems to think equity is virtually worthless but bonds could be worth 3 times current value.

I'd be careful saying that.

https://twitter.com/WShak1/status/1148222274887127045

Thomas Cook bonds back below 35%, indicating equity wipe-out is on its way. Current £200m market value for #TCG is fantasy. If equity is worth total £1m in total market cap after debt made whole, then the bonds are worth 3 times current value.

I read It as saying that the bond price shows the equity is worthless, not that the equity price shows the bonds are undervalued.

[Kr1ck]

I'm not sure what went wrong with my comprehension skills, I can only assume that it was due to the early hour of the post. Thank you for pointing it out.