Enterprise Inns has announced details of the final terms of its £97m bond offering that was announced on Thursday.
The bonds will have a maturity of seven years and bear a coupon of 3.5% per annum payable quarterly in arrear. The reference share price has been set at £1.415 and the initial conversion price has been set 35% higher at £1.9103.
Neil Smith, chief financial officer of ETI said: “We are very pleased with the success of this transaction. Taking advantage of favourable market conditions, we have accessed a new source of low cost, unsecured financing to strengthen our balance sheet which allows us to maintain optimum flexibility.”
Leading analysts have welcomed news of the bond offering.
Douglas Jack at Numis said: “The funds would be used to pay off its most expensive tranche of bank debt and enable the company to reduce pub disposal activity. Overall, this should enhance cashflow and be P&L neutral. It should also help the company to be less defensive (relying on disposals) and more progressive in returning the company to growth.”
Simon French at Panmure Gordon described it as a “positive move” that would “provide increased flexibility in the capital structure and the potential to return the estate to growth”.
“The stock trades on a CY 2014E adjusted EV/EBITDAR of 10.1x and a P/E of 7.8x. Given the limited likelihood of forecast upgrades this seems broadly appropriate to us and we reiterate our Hold recommendation and 123p Target Price.”
