Intrum - comment

Two developments stand out this morning: Deleveraging (on a Cash EBITDA basis, but never mind) will take longer - more in line with our projections and the company’s original remarks in early 2024, and the  creation of seven (7) JVs with Cerberus in the last quarter, income from which will be booked under Servicing. We find the latter encouraging, although not to a point where we’d deem the bonds particularly attractive. Underwriting IRRs are up, but the bump in the company’s cost of debt (100% of capital) following the restructuring should consume that entirely, leaving only a vague story around cost savings and market expectations to shareholders and recovery plans. The cost savings are to come from Othelos, an AI bot, but as everyone will be rolling those out, we expect most of the benefits to be handed through to clients very quickly. Market expectations of higher underwriting IRRs in the future are - just that.