eDreams Odigeo debt flat on €75M deleveraging effort

Debt backing Spanish online travel group eDreams ODIGEO SA is trading flat today, despite an announcement on Jan. 12 that the company has successfully raised €75 million in new equity to accelerate deleveraging and drive growth as the group looks to rebound from the effects of the pandemic.

The Madrid-listed company said it plans to use up to €50 million of proceeds to repay part of its outstanding €425 million of 5.5% secured bonds due 2023, which the group placed at par in 2018 and were first callable in 2020.

These notes are today trading unchanged in a 99.71/101.30 market, according to Tradeweb, indicating uncertainty as to whether the company will exercise a 101.375 call on Jan. 24. The bonds began the week at around 99.6 on the bid, having dipped to around 98.2 on the emergence of the omicron variant of COVID-19 in November.

Having sank to around 50 cents on the euro at the initial onset of the pandemic in March 2020, the bonds recovered well and were trading above 90 through the course of last year. Like other companies affected by COVID-19, the company obtained covenant waivers on its debt and maintained access to ample liquidity.

Additional proceeds from this week’s capital raise will be used to fund general corporate purposes as well as expansion of the group’s Prime subscription service, which had 2.2 million users at the end of last year, up from 1 million in June 2021.

The new shares, which were priced at €8.50 each, represent 7.43% of eDreams' equity prior to the increase and 6.91% of share capital following the transaction.

Santander, Barclays and Deutsche Bank were joint global coordinators on the capital raise, while BBVA and Societe Generale were joint bookrunners. CaixaBank was a co-lead manager.

eDreams Odigeo is an online travel business which operates brands including eDreams, GOVoyages, Opodo, Travellink, and Liligo. The company completed its IPO in 2014 and is rated CCC+/B3.