Why Bondholders Could Struggle to Check Out of Thomas Cook

Thomas Cook’s management team is facing a new challenge in its battle to save the 178-year-old travel group: credit default swaps, the Financial Times reported. The UK-based tour operator agreed the main terms of a £900m rescue deal with its biggest shareholders and lenders last month, after failing to adjust to a big shift by customers from the high street to the internet. But now the company is looking to push back a crucial meeting with its bondholders, originally set for Wednesday this week, partly out of fear that a group of hedge funds will block the deal. The hedge funds are not resisting because they think the rescue plan is a bad one. Nor do they think the restructuring is too favourable to shareholders, rather than creditors. It is because they are worried the scheme might not trigger payouts on CDS. Read more