Waterfall Model: Lack of Near-Term Triggers Gives HSE Finance Time to Recover, But Significant Refinancing Risk Remains Given High LTV, Changing Consumer Preferences; Cash Coupons Until 2025 Could Partially Derisk SSN Investors in Mid-50s

German shopping retailer HSE Finance’s €250 million floating rate and €380 million fixed rate senior secured notes are quoted in the mid-to-high 50s yielding between 26% and 32%, according to Bloomberg as of Monday, June 5, reflecting the decline in the group’s earnings in 2022. The lack of near-term triggers gives the company time to...