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Four Seasons debt odyssey – still one more year to go
Four Seasons Healthcare, the UK care home operator, has finally completed its 1.5 billion pound debt restructuring, after a year of creditor wrangling. The group has ended up in the lap of lenders including RBS, which owns about about 40 percent of the company.
Now it has to set about refinancing 600 million pounds of asset-backed debt due next September, which makes up the bulk of its remaining 780 million pound debt pile. If the company can pull it off it will be extra good news for RBS, which managed to negotiate a deal giving it an extra slug of equity (just over two percent) in exchange for advisory services, based on performance.
Four Seasons isn’t the private healthcare group to end up in RBS’ loving hands. The bank also indirectly owns the Priory Group – which it inherited from ABN Amro. The Dutch bank’s structured financiers bought the group in 2006 and refinanced later in the asset backed debt market.
Four Seasons original owner, Three Delta, run by former Natwest banker Paul Taylor, was less lucky. The company defaulted after failing to refinance a two-year loan taken out at the time of its acquisition at the top of the market in late 2006.
The European Commission strikes back
Reeling from the humiliation of failing to stop Belgian bank KBC paying interest on some of its subordinated bonds, the European Commission has won a new victory in its bid to see bondholders share the pain of bank bailouts.
Acting as a sort-of policeman for Brussels, the UK’s Financial Services Authority has prevented the Royal Bank of Scotland from repaying four subordinated bonds at their first opportunity, causing prices to plunge by up to 15 percent. The Upper Tier 2 euro-denominated bonds fell to between 70 and 75 cents, depending on who you ask.
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The Wall
