TRANSPORTATION: Evri (Secured; B2/B+) IPT
(NOT Everi/EVRI - who is a $ issuer gaming co. Evri/issuer was previously called Hermes)
(Apollo deal)
£500m 7NC2 Snr Sec 8.5%a (+/-12.5) eqv. to OAS+450/UKT+460
Worth looking at this deal - it's giving some width despite firm operating performance and long contractual relationships with large clients. It is eating IDS's market share - unclear if Daniel Kretinsky taking ownership (pending UK gov. approval) will help put a pause to that - but makes this interesting re. diversifying out the (struggling to be profitable in UK) IDS risk (its 30s trade -150bps inside).
That needs to be balanced with the leverage - not at concerning levels though (Moody's adj. gross at 6x, co reported forward looking net 4.9x) and expected to come down naturally on continued earnings growth. Clearer downsides are Apollo/PE ownership limiting rating upside in near-term and the competition from Amazon who holds the monopoly on its platform orders and now provides delivery as a external service.
We have excluded the £Mobico perps (B1/NR/BB) trading at 8.6% to the 2031 call - large upside on it if it calls on the first date (co indication is it will not and ~financially attractive to not replace).
Notes on the co here