Vallourec - Consent / Composition / Convertibles

All,

Please refer to our unchanged analysis here.

The Vallourec call was mostly administrative today and primarily had the purpose of rallying bondholders to agree to the waiver request to allow oversight of the negotiations under a Mandataire Ad-Hoc - specifically Ms. Bourbouloux.

Ad-Hoc Group composition: The bondholder ad-hoc group may be split into two tiers. Apollo and M&G are apparently holding approx. 1/3 of the bonds and the idea is that they pre-negotiate a deal and only refer to a wider 5-6 member ad-hoc group from time to time.

As regards the waiver: Consent so far runs just shy of the pass mark of 50% and the deadline is tomorrow. We have not heard so, but would imagine that at this early stage a deadline can be postponed to allow for more consents to be given. We are however a little astonished that consent so far is running that low. If we held bonds at present, we would certainly agree to the waiver. We are told that a good amount of bondholders has been on the call and that at least by those standards the solicitation should be successful tomorrow.

Convertibles: Regarding our legal work and from our conversations with Messier Maris and independently Ashurst Paris, the convertibles rank p.p. with the other holdco bonds and the RCF. We have been seeing low prices quoted in the market relative to the straight bonds and are scratching our heads. If anybody knows the reason for this, do please let us know.

Action: Please get in touch if you are interested in the name or perhaps exposed.

Tomás is your analyst.

Wolfgang