Holders of credit insurance on Casino Guichard-Perrachon SA are set to receive a big payout after the company skipped interest payments while it was negotiating a restructuring with its creditors.
(Bloomberg) — Holders of credit insurance on Casino Guichard-Perrachon SA are set to receive a big payout after the company skipped interest payments while it was negotiating a restructuring with its creditors.
The French grocer’s unsecured bonds were valued at 1.625 cents on the euro in an initial auction to settle the credit-default swaps, according to Creditfixings. The value of the payout is 100 minus the value of the bonds, so holders of the default protection contracts could get more than 98% of the bonds’ face value in this case. Final auction results will be posted on Creditfixings website at 3 p.m. in London.
Casino has been in court-supervised talks with creditors since late May to restructure the balance sheet and the business. Under an agreement reached with a group of investors led by Czech billionaire Daniel Kretinsky, all of the company’s €3.5 billion ($3.72 billion) of unsecured debt and more than €1.3 billion of the secured debt will be converted into equity.
Following the conversion, unsecured bondholders stand to control 1.8% of the company’s equity. Bondholders with CDS contracts, meanwhile, stand to make more money by delivering their notes in the auction and getting paid the default protection.
These are the deliverable obligations for the auction:
Read more: Casino CDS Holders Set for Payout After Credit Event Ruling (1)
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