...- As recovery of global air traffic appears to be weaker than we previously foresaw, airline caterer gategroup is likely to continue burning cash over the next 12 months, which will weigh on its liquidity. To support gategroup's liquidity needs, its shareholders, Temasek and RRJ Capital, agreed to provide an interim liquidity facility of Swiss franc (CHF) 200 million. Additionally, the owners will be providing further funds to the company in the form of equity (CHF25 million) and a long-term subordinated convertible loan (CHF475 million). Furthermore, gategroup's bank lenders have agreed to extend the maturities of 665 million syndicated facilities from October 2021. - Although the proposed transaction could help gategroup reduce refinancing risk, it is conditional upon bondholders extending the maturity of the CHF350 million unsecured bond to February 2027 from February 2022. The outcome and timing of these negotiations remains uncertain; therefore, we also see an elevated risk of distressed...
