WH Smith Sale of Stores Could Mean Default Event, Jefferies Says
- Retail arm sale could trigger ‘cessation of business’ clause
- Unit is a guarantor of company’s convertible bonds: Jefferies
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British retailer WH Smith Plc’s potential sale of its high street business risks triggering an event of default on its debt, according to the convertible bond desk at Jefferies.
The London-listed company, a purveyor of sandwiches and magazines, is exploring options including selling its UK high street arm that operates more than 500 stores. This could lead to a so-called “cessation of business” clause on its bond documentation, and therefore become an event of default, Jefferies said in a note to clients seen by Bloomberg.