Nov 24, 2014
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Vivarte's loans plummet again to distressed levels

Nov 24, 2014

LONDON, United Kingdom - The secondary price of struggling French retailer Vivarte's loans have plunged to distressed levels and the company will meet lenders and shareholders before the end of the year to discuss its options, banking sources said on Monday.

Vivarte's loans fell to 44.8 percent of face value on Nov. 24, according to Thomson Reuters LPC data, from around 60 on Nov. 20.

Vivarte declined to comment.

The French retailer's loans were trading at around 85.7 in early November after a debt restructuring at the end of October wiped out 2 billion euros (2.48 billion US dollar) of Vivarte's 2.8 billion euros of loans.

Vivarte's loans dropped to around 65 percent of face value as it released poor financial results on Nov. 7

Around four million euros of the term loan traded at about 63 on Nov. 12 to a distressed buyer, sources said.

The most recent drop to around 45 is due to more lenders taking the decision to sell the loans in a bid to stem further losses and a lack of buyers at around 60, traders said.

Two more blocks of Vivarte's loans of one to two million euros each, also traded last week in the low 50s and high 40s, the traders added.

"There were no bids in the 60's for Vivarte's paper. Some institutions needed to get out of the name before year end. The street has been buying the paper and the plan will be to sell it to distressed investors. More selling is expected," one of the sources said.

The current trading levels on Vivarte's 800 million euros of existing resinstated loans suggest that the company's problems were not resolved by the debt restructuring, traders said.

Oaktree, Alcentra, GoldenTree and Babson became core shareholders in Vivarte after its debt restructuring. The owners and eleven funds also provided a 500 million euro super senior loan.

The super senior term loan is Vivarte's highest-ranking debt and was quoted at around par on Monday as it has better repayment prospects than the company's 800 million euro reinstated term loan.

1 US dollar = 0.8057 euro
1 GBP = 1.26287 euro

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