OHLA - comment

Moody’s rating change acknowledged the importance of the sale of Caneljas and CHUM for OHLA. The growth opportunities shown in a healthy order book are constrained by cash trapped in JVs and the banks due to past missteps. We had expected more progress by now, releasing the €176m of cash collateral held by the banks, but current turmoil in real estate is unlikely to see banks in a generous mood when releasing collateral. OHLA wants to hold on to Canalejas long enough for the shops to be let fully and the price to rise. For now, management still has time but bond maturities in 2025 may force a sale of Canalejas.

The €416m SSNs bonds will need refinancing in Mar-25 (50%) and Mar-26 (50%). These bonds will also see PIK interest rise 315bp to 465bp in September 23. The bonds, including the PIK component, are priced at 88c/€, yielding over 15%.