Atalian - comment

The reports of bondholders retaining a legal advisor is a surprise but not a shock. Atalian has intimated that it would redeem part of the 2024 bonds, but this would leave the 2025 bonds outstanding and virtually impossible to refinance. Some form of amend and extend will be the preferred bondholder route, but with >€700m cash on hand, Atalian is not under any immediate pressure to take action. The company has said it will announce its strategic plan in Q3 and aims to complete its refinancing by Feb-24, and it is still in control of the process. There is little incentive for management to allow bondholders to dictate the pace. However, if bondholders want to formulate a plan ahead of time, being prepared is better than being surprised.