(Bloomberg) -- Worldline SA has embarked on a refinancing exercise that will increase the embattled fintech firm’s interest bill but bring in some much-needed cash to help cover upcoming debt maturities.
The French payments processing company, formerly owned by tech firm Atos SE, is selling a five-year bond on Thursday, offering a yield of around 5.75% at initial price discussions, according to a person familiar with the matter who asked not to be identified.
The sale, which has received investor bids of more than €1.5 billion ($1.6 billion), will be used to raise funds for operations as well as partly pay off two convertible bonds maturing in 2025 and 2026, the person said.
A spokesperson for Worldline didn’t respond to a request for comment.
The deal caps a tumultuous year, during which Worldline issued three profit warnings as a slowdown in consumer spending hurt earnings. The company’s shares have lost more than half of their value over that time, making it highly unlikely that the convertible bonds will convert to stock on maturity.
“They are effectively a legacy provider of payment services and are competing in a competitive industry against some more dynamic players,” said Soomit Datta, an analyst at New Street.
Worldline has €1.9 billion of debt coming due in the next three years, including the convertible bonds. Those notes were sold at the height of the easy money era when some growth and tech companies were able to issue so-called zero coupon bonds that can convert to stock on maturity at a pre-agreed price. The conversion price on the notes maturing in July 2025 is €119.44 per share, while the stock is currently trading at €7.
The current bond sale was previously being informally discussed with a coupon in the area of 5.5%, according to a separate person familiar with the transaction. The average yield on a Bloomberg index of Triple B-rated names is 3.35%.
Worldline’s bonds maturing in July 2025 have risen in recent days, with the cash price hitting its highest price since February 2022 earlier this week.
--With assistance from Meg Short.
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