Stonegate - comment

We have had doubts about the potential pub sale, so we are not surprised that the transaction is evolving. Stonegate is seeking £1bn in proceeds. Originally, 800 pubs were to be disposed of, but now 1,000 are being sold to a stand-alone vehicle (SPV) that will raise debt. TDR has £2.2bn in maturities in March 2025, so time is not on its side. However, lowering LTV in the SPV would be a zero-sum game,  coming at the cost of raising LTV in the remaining portfolio.

In our analysis of how best to structure the 800-pub sale, we separated the property ownership and the operations to increase the potential valuation. We still think this would be a better solution, but Stonegate looks to be struggling to find buyers. When we get some meat on the bones of this article, we will update our analysis.