Afren - Distressed

As expected, Afren have received a deferral of the US$50m amortisation of their EBOK RBL, they have exercised a 30 day grace period for the payment of the coupon on the 2016 bond, and Seplat have received a two-week extension from The Takeover Panel as they weigh making an offer.

Bonds are keenly priced to Street assessment of recovery value, but it's a cheap 1st Lien option on the Brent oil price over the next month - which has been supported by the falling US rig-count and not been hit by the on-going strikes at 10% of US refining capacity, and should cause further WTI/Brent spread widening if it is prolonged. The last nationwide work stoppage in 1980 lasted three months.