Lucror Recommends Buying Total Play Bonds on Exchange Offer

Published 25 March 2024, 09:25:37 [BFW]
By Maria Elena Vizcaino

(Bloomberg) -- Lucror Analytics is recommending clients buy Total Play notes due in 2025 after the company announced an exchange offer on Friday, as there’s “solid upside” on the bonds as the company’s debt maturity profile improves with the exchange. 

  • Analyst Sebastian Hofmeister says the new amortizing bonds due in 2028 will trade at significantly lower yields once issued
  • Lucror previously had a “speculative buy” recommendation on the bonds
  • Also recommends buying the existing bonds due in 2028
  • “We caution, though, that this is a tactical bet”
    • “The notes will remain highly sensitive to the company’s further progress with planned liquidity management exercises as well as operating and FCF trends”
  • Total Play expected to continue to raise free cashflow until breakeven levels in fiscal year 2024 as capex declines and EBITDA grows
  • Bonds due in 2028 jumped 5.2 cents to 44.8 cents on the dollar, the highest in more than two weeks, amid thin liquidity, according to Trace data