(Alliance News) - Saga PLC on Tuesday launched a GBP250 million bond offer as it looks to strengthen its balance sheet and push back debt repayments.
The over-50s' travel and insurance provider announced several financing transactions which it said will increase liquidity, extend debt maturities and provide headroom against covenants.
Shares were up 4.4% to 440.62 pence in London. They're up 72% year-to-date.
The Folkestone-based company made a tender offer to buy back up to GBP100 million of 3.375% bonds due in 2024. It will also repay its GBP70 million term loan and amend covenants in its revolving credit facilities.
Those debts will be replaced with a new GBP250 million fixed-rate guaranteed bond. The terms of the new bond will be announced later, Saga said.
Moody's affirmed Saga's B1 rating, four notches off investment grade, following the announcement. The agency changed its outlook to stable from negative, saying Saga has strengthened its financial position and it expects a steadily improving profitability as travel resumes.
The GBP250 million bond will improve Saga's financial flexibility and enable it to handle downside scenarios, Moody's said.
The company has been undergoing a turnaround strategy since September 2020, when a new management team committed to cutting debt and restructuring the business. It plans to resume cruises on Sunday.
By Ivan Edwards; ivanedwards@alliancenews.com
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Saga (SAGA)