Travelex Limited and TP Financing 3 Limited unlikely to comply with required Leverage Ratio for Q1 2020

Maria Nikolova

The Travelex Group’s current view is that the Revolving Credit Facility borrowers are unlikely to comply with the required Leverage Ratio for Q1 2020, which is due to be tested on March 31, 2020.

Travelex Financing Plc today provided an update to stakeholders of Travelex Holdings Limited and its subsidiaries (the “Travelex Group”) on the status of the business and the steps being taken to address the current situation.

In line with an earlier announcement, Travelex Group reiterated that it has a legal and financing structure capable of operating separately, on a stand-alone basis, and recent board changes reflect this independence from Finablr PLC (LON:FIN) and its shareholders.

Last week saw the Finablr representatives Dr BR Shetty, Binay Shetty, Abdulrahman Basaddiq and Promoth Manghat resign from the Travelex board. The continuing Travelex board directors are Tony D’Souza, Travelex CEO, and James Birch, Travelex General Counsel. These changes, Travelex notes, mean that there is no longer any overlap between the boards of Travelex and Finablr.

Travelex has also appointed an independent team of advisers to support the Travelex Group, separate to those appointed by Finablr, including Sidley Austin LLP as legal advisor and PwC as financial advisor.

Travelex and its advisers have begun discussions with certain of the group’s lenders and their advisers and with the advisers to certain bondholders representing more than 60% of the outstanding face value of the Senior Secured Notes.

In parallel, Travelex is also exploring various avenues with stakeholders to ensure continued access to funds. The company notes the recent letter from HM Treasury, the Bank of England and the FCA in regard to, inter alia, new or increased overdrafts from UK banks. The company’s key lenders have already been providing support for the Travelex Group.

Travelex also commented on covenant compliance. Based on unaudited management accounts TP Financing 3 Limited and Travelex Limited (the “RCF Borrowers”) complied with their Q4 2019 financial covenant requiring a Leverage Ratio at or below 3.48x. Let’s recall that Travelex estimated that there will be a reduction of Underlying EBITDA in Q1 2020 compared to the equivalent period of 2019, mostly attributable to the malware. The outbreak of COVID 19 has resulted in an increased number of airline cancellations and airport closures which is likely to worsen the position.

The Travelex Group’s current view is that the RCF Borrowers are unlikely to comply with the required Leverage Ratio for Q1 2020, which is due to be tested on March 31, 2020.

The Company is intending to use its grace periods to seek appropriate waivers from its lenders under its Revolving Credit Facility.

Earlier this week, Standard & Poor’s took rating actions regarding Travelex Holdings Ltd. S&P lowered to ‘CC’ from ‘CCC’ its issuer credit rating on Travelex. Additionally, it lowered its issue rating on the group’s €360 million notes due 2022 to ‘C’ from ‘CCC-‘ and the issue rating on the £90 million super senior RCF to ‘CCC’ from ‘B-‘.

Read this next

Digital Assets

Monex Group expands crypto business with 3iQ takeover

Monex Group has completed the acquisition of a majority stake in 3iQ Digital Holdings, Inc., a Canadian digital asset investment fund manager, as part of its strategy to expand its crypto business.

Education, Fintech, Inside View

How to Get Into Fintech: Best Tips to Succeed

The Fintech sector is experiencing significant growth, with fresh opportunities emerging rapidly.  Innovations such as machine learning and cryptocurrency are revolutionising finance, leading to a need for trained experts.

Digital Assets

FalconX launches Prime Connect on Deribit

“We are pleased to launch Prime Connect with Deribit and look forward to providing our full suite of prime services which allow institutions to confidently scale their digital assets portfolios while trading on exchanges.”

Retail FX

Lion launches multi-currency trading accounts powered by AI

The core advantages of multi-currency trading account services include enabling significant cost savings and higher efficiency for investors.

Inside View, Interviews

Interview: Stanislav Bunimovich on Finalto’s white label solution

To explore what makes Finalto’s white-label solutions stand out in such an incredibly competitive market, Finalto sat down with its Chief Operating Officer, Stanislav Bunimovich, for an interview. 

Digital Assets

Talos acquired Cloudwall for a better portfolio management system

Cloudwall’s additional expertise in portfolio risk systems further positions Talos at the forefront of portfolio management systems across spot, futures, perps, and options.

Digital Assets

Bybit’s Bitcoin market share explodes, up by 400%

“This milestone is a testament to our sharp trading products and the loyalty of our users. As the industry evolves, Bybit remains at the forefront, ready to set new standards in the crypto trading world.”

Crypto Insider

Why Self-Custody is the Key to Secure Crypto Trading

Crypto trading is fast gaining popularity; as of writing, the total market capitalization stands at $2.3 trillion, double what it was at the onset of the 2021 bull market.

Industry News

UK FCA sues Lee Steven Maggs for FX scam Kube Trading

‘Kube Trading’ allegedly received around £2.67 million for FX trading and concealed significant losses from investors.

<