Double Restructuring No Barrier to Yell Selling Junk Bonds

(Bloomberg) -- Risk appetite has returned to the credit markets and that’s encouraging borrowers of all kinds to try to sell new bonds. One name that people may not have expected is Hibu Group Ltd, maybe better known as the directories business Yell.

Yell Bondco Plc is planning to raise 225 million pounds ($320 million) of senior secured notes and begins meeting investors today, according to a person familiar with the offering, who is not authorized to speak publicly and asked not to be identified. Proceeds will be used to repay existing borrowings.

Hibu, based in Reading, England, has twice restructured its debt, first in 2014 and then again in 2016, as it battled to cope with a shrinking market for paper directories and large amounts of buyout debt raised prior to the global financial crisis. The last debt write-offs halved the company’s external borrowings to about 550 million pounds, according to its annual report for the year to March 31, 2017, including about 250 million pounds of cash-pay notes paying interest of about 8 percent above interbank rates.

Yell’s bond comes at a busy time for sales of high-yield securities in Europe, and it’s not the only company that’s sought funds from bondholders after writing off debt. French oilfield services company CGG SA, which last year restructured its debt, sold $300 million and 280 million euros of bonds last week. Suitcase maker Samsonite International SA, which filed for bankruptcy protection in 2009, on Wednesday priced 350 million euros of notes and is also planning to refinance loans.

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