NYRSF - Nyrstar Bonds Are A Compelling Arb Opportunity
Summary
Nyrstar (NYRSF) is the 2nd largest zinc smelter globally with Trafigura as a key supplier, offtaker, and shareholder. Nyrstar’s bonds sold off to extremely distressed levels in late 2018/early 2019 to a confluence of low treatment charges ("TCs") and low zinc prices (usually inversely correlated), which led to a series of profit warnings and a liquidity crisis for the Company which lost a significant amount of off balance sheet liquidity and access to working capital lines.
On April 15, Nyrstar announced a comprehensive restructuring deal with Trafigura and noteholders in which Trafigura would