Spanish online travel group eDreams ODIGEO SA today announced plans for a new €375 million offering of 5.5-year (non-call two-year) secured bonds to fund the early redemption of its €425 million of 5.5% secured bonds due 2023.
Global coordinators Deutsche Bank (B&D), Barclays and Santander will chair an investor call on Monday, Jan. 17, at 10 a.m. London time, with further virtual meetings scheduled through Tuesday, Jan. 18.
Today's announcement follows a €75 million capital raise that was completed on Jan. 12, of which up to €50 million was earmarked toward refinancing the borrower’s outstanding secured notes due 2023. The bonds initially traded flat on news of the equity offering but have today risen to their call price of 101.375, with the call date for the outstanding bonds scheduled for Jan. 24.
EDreams placed the 5.5% 2023 notes in 2018, with the first call option for the bonds coinciding with the emergence of COVID-19 in 2020. Having fallen to around 50 cents on the euro at the initial onset of the pandemic in March 2020, the bonds recovered well and were trading above 90 through the course of last year. Like other companies affected by COVID-19, the company obtained covenant waivers on its debt and maintained access to ample liquidity.
The new bonds will include a 40% equity claw at par plus coupon for first two years as well as the increasingly common 10% special call per annum at 103%, which is also applicable during the non-call period. The company's existing super senior revolving credit facility will be extended and upsized to €180 million, from €175 million, in connection with the transaction.
In an investor update last November, eDreams reported bookings were up 22% versus pre-COVID-19 levels for the first half of 2021 and an increase in revenue of 190% year over year. The company has launched an Amazon Prime subscription model and reached 2.2 million users at the end of last year, up from 1 million in June 2021.
S&P Global Ratings in a report published today reaffirmed the company's CCC+ rating with a positive outlook and assigned a CCC+ rating and 4 recovery rating to the planned secured notes. Ratings said the transaction would "extend eDreams' debt maturity profile, reduce its interest burden, and improve its liquidity position." The company is rated B3 by Moody's. The agency described the capital increase as "credit positive" in a report published Jan. 13 but has yet to assign ratings to the planned bond issuance.
The company completed its IPO on the Madrid stock exchange in 2014 and operates brands including eDreams, GOVoyages, Opodo, Travellink and Liligo. BBVA, Societe Generale and Morgan Stanley are additional bookrunners on the bond offering, while CaixaBank is a co-lead manager.
*The article was updated at 5:30 p.m. London time on Jan. 14 to correct the issue rating from S&P Global Ratings in penultimate paragraph.
This S&P Global Market Intelligence news article may contain information about credit ratings issued by S&P Global Ratings. Descriptions in this news article were not prepared by S&P Global Ratings.
