Klockner Pentaplast - comment

As part of the wall crossing process in their current refinancing discussions, the German plastic packaging group through its advisers have asked new investors (which are primarily private credit funds) to not sign a co-op agreement (especially if they decline the deal) which would prevent the creation of new creditor groups and reduce their negotiating power when it comes to pricing for the new debt structure.  Klockner and its shareholders seem to have learned from their past experience in the summer when their US based lenders and 50% of their European lenders signed a co-op agreement.  The disadvantage to this approach is it would prevent any refinancing to be over subscribed as it will preclude a subset of investors in the market. Time will tell whether SVP will get better economic terms for their debt or not.  In the meantime, the clock continues to tick as the company reports its Q3 2024 results at the end of November and finalise a deal before the US Thanksgiving holiday. We bought the 4.25s in June at 86c/€ and remain long into the refinancing.