Stonegate - comment

Stonegate is dealing with its maturity wall and undertaking the required Amend and Extend (A&E) operation. Hold-out bondholders will get repaid at par and those who have participated in the A&E are getting higher coupons in exchange for a five-year extension. Stonegate persuaded 54% of bondholders to sign up so around £1bn of new bonds, sold to repay hold-out bondholders. The make whole provisions will have made the Class N notes prohibitively expensive to call, and holders were not prepared to allow the security to be reduced. We expect Stonegate to return to this problem in the future. The 2nd Lien is being repaid by £250m cash injection from TDR (we had expected £200m) and a new £156m cash pay 2nd Lien. The Unique Securitisation will now have just £190m in debt and £1.4bn in Net Worth. Stonegate is buying itself five years of space to allow for the pub market to recover from COVID-19 and the Cost-of-Living crisis. We will prepare a full update when the deal has been completed and Wolfgang is back from leave.