Global Blue Announces Repricing of Term Loan and Revolving facility

Rhea-AI Summary

Global Blue Group Holding AG (NYSE: GB) has shown a strong recovery with decreased net leverage, aiming for further reduction, leading to a repricing of its term loan and revolving facility. The interest rates for both facilities are set to decrease, enhancing the Company's financial position.

Positive

• Global Blue Group Holding AG demonstrates a robust recovery with decreased net leverage from 4.5x to 3.6x in just a short period.

• The Company has actively de-levered towards a target of less than 2.5x, showcasing a commitment to financial stability and growth.

• The successful allocation of the repricing of the Term Loan and Revolving Facility indicates a positive response from investors.

• The interest rate margin reduction on the Term Loan and Revolving Facility will bolster cash flow and potentially increase profitability.

Negative

• None.

Insights

Financial Analyst

The announcement from Global Blue Group Holding AG regarding the successful repricing of its term loan and revolving credit facility reflects a positive financial restructuring effort. Specifically, the reduction in interest rate margins by 100 basis points on both financial instruments will likely result in a decrease in debt servicing costs, potentially freeing up cash flows for reinvestment or further debt reduction.

An investor should note that the leveraged position of the company has improved, going from a net leverage of 4.5x to 3.6x, which is closer to the targeted leverage of less than 2.5x. This indicates a healthier balance sheet and suggests a disciplined approach to debt management. The interest margin reduction, tied to a margin ratchet based on leverage, also incentivizes the company to maintain or further reduce leverage, aligning the interests of debt holders with equity holders.

However, while reduced interest expenses are beneficial, they must be weighed against the context of potential risks such as market volatility, credit risk and the ability to sustain EBITDA growth. The latter is particularly important, as it underpins the company's leverage improvement.

Market Research Analyst

The behavioral trend of increased travel and shopping plays a vital role in boosting Global Blue's EBITDA and cash flow, which is encouraging for investors. These trends are important drivers for the company’s core business and their positive impact on the company’s financial health suggests a strong market position, particularly as the world continues to recover from pandemic-induced disruptions.

It is important for investors to recognize that the repricing may also reflect an improved credit perception by lenders, or a more favorable interest rate environment. The move to secure more attractive terms is strategic, indicating management's proactive approach to cost management and capital structure optimization.

Considering the closing of the repricing is projected for mid-2024, investors should monitor the broader economic conditions, as shifts in interest rates or consumer behavior could impact the anticipated benefits from the repricing.

SIGNY, Switzerland--(BUSINESS WIRE)-- Global Blue Group Holding AG (the “Company”) (NYSE:GB) has continued to demonstrate a robust recovery, underpinned by the entrenched behaviour of travel and shopping, driving significant EBITDA and cash flow growth. Consequently, net leverage reduced from 4.5x in September 2023 to 3.6x in December 2023, with the downward trajectory continuing, as the Company continues to actively de-lever towards its public leverage target of less than 2.5x. In light of this ongoing recovery and deleveraging trajectory, the Company launched a repricing of its seven year €610 million senior secured term loan (“Term Loan”) and €97.5 million senior secured revolving credit facility (“Revolving Facility”).

The Company today announced that its subsidiary Global Blue Acquisition B.V. (the “Borrower”) has successfully allocated the repricing of Term Loan and Revolving Facility. The repricing is expected to close on or prior to 30 June 2024 and upon closing will reduce the interest rate margin applicable to the Borrower under the Term Loan by 100 basis points from 5.00% p.a. to 4.00% p.a. and the Revolving Facility by 100 basis points from 4.50% to 3.50%, in each case subject to further reduction pursuant to a margin ratchet based on leverage.

ABOUT GLOBAL BLUE

Global Blue is the business partner for the shopping journey, providing technology and services to enhance the experience and drive performance.

With over 40 years of expertise, today we connect thousands of retailers, acquirers, and hotels with nearly 80 million consumers across 53 countries, in three industries: Tax Free Shopping, Payments and Post-Purchase solutions.

With over 2,000 employees, Global Blue generated €20bn Sales in Store and €311M revenue in FY 2022/23. Global Blue is listed on the New York Stock Exchange.

For more information, please visit www.globalblue.com

Source: Global Blue

View source version on businesswire.com: https://www.businesswire.com/news/home/20240503738756/en/

FOR FURTHER INFORMATION

Frances Gibbons – Head of Investor Relations

Mob: +44 (0)7815 034 212

Mail: fgibbons@globalblue.com

Source: Global Blue