Credit traders are quoting Merlin Entertainments Ltd.'s private loans far above distressed prices, reflecting investor value on debt backed by prized UK assets like the London Eye. Traders at banks including Barclays Plc and broker Market Securities LLC are showing indicative prices of around 101 cents on the euro and dollar for the €418 million ($470 million) and $396 million tranches ahead of expected issuance by year-end. By comparison, Merlin's €700 million secured bond due in June 2030 is quoted at around 66 cents on the euro after falling about 14 cents since new financing was announced Sept. 10.
The new loans rank alongside senior secured debt but also carry additional claims over the London Eye and other cash-generative UK assets, potentially giving holders higher recoveries if the company defaults. The debt was arranged to refinance $830 million of unsecured bonds due next year. A small group of funds is providing the financing, with a portion reserved for existing lenders.
The loans are being quoted on an "if and when issued" basis. The refinancing comes as the Legoland owner battles weaker earnings and rising costs, with lower consumer confidence hitting visitor numbers at some UK attractions in latest quarterly results.
Source: Bloomberg Markets · Summarized by HeadlinesBriefing