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Hedge funds circle House of Fraser bonds

A group of US hedge funds has reportedly been snapping up bonds in House of Fraser, which have been falling in value amid concerns over tough trading conditions on the high street.

Last year HoF sold £175m worth of bonds on the Luxembourg stock exchange, as part of a £300m refinancing scheme. The value of these bonds has now fallen to 83p in the pound.

A source told The Sunday Times New York-based Apollo Global Management Group is said to be among the funds to have snapped up some of the bonds, attracted by the low price. The private equity arm of Apollo is not involved at this time, but the source suggested it could be in the future.

It comes after HoF revealed in its latest trading update in September that sales were flat in the 26 weeks to 30 July, and down 2% year on year in eight weeks to 24 September. It described the trading environment as “very challenging”. 

HoF chief executive Nigel Oddy said he expected the “uncertain economic situation to remain for some time”, but insisted the retailer is in a strong position to maximise trading in the second half.

Drapers has contacted HoF for a comment.

Readers' comments (1)

  • HOF is an enigma or more to the point, 'All fur coat and no knickers'. One years profit in 10 is desperate form, yet they somehow always project better days ahead. No wonder there are concerns with the retailer, though time will tell whether it will turn into a retail version of Monty Python's 'The Black Knight'.

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