Boparan - comment

Once again, a rabbit from the hat arrives when Boparan is refinancing. The sale of the European business will reduce headline leverage to 2.7x. The new SSN is a £390m 5-year (NC2) deal on an Adjusted EBITDA of £141m and a margin of 6.4%. Margins of ~6.5% will likely be under pressure as supermarkets previously saw 5% as normal. In previous refinancings, pressure in the supply chain has followed quickly. We will take a proper look at the OM, but our bias is to look at Boparan as a short once the deal is done.