Thomas Cook’s Bonds Fall Sharply On Debt Concern

Thomas Cook’s bonds suffered heavy losses while the cost to insure against a potential default leapt higher on Thursday, amid mounting concern over the travel company’s ability to service its debt, the Financial Times reported. Investor angst deepened after at least one of the travel group’s lenders sold a loan it made to the company at a highly-distressed price. A revolving credit line was sold this week at around 59 pence on the pound, according to debt investors. Other trading levels seen by the Financial Times also showed that banks have been looking to sell this piece of debt to hedge funds at between 50 and 60 pence on the pound. An earlier report by Bloomberg about the loan sales sparked a sell-off in the company’s bonds on Thursday. Thomas Cook declined to comment on the trading activity. Revolving credit facilities are held by a company’s banks rather than institutional investors. Read more