THG’s Term Loan Climbs Above Par as Investor Confidence Continues to Improve (THG)

Term Loan Reaches Strongest Level Since 2021

THG PLC (LSE:THG) has announced that its €445 million Term Loan B, issued in March 2025, has traded above par value for the first time and reached its highest level since November 2021.

The milestone follows a succession of positive trading updates throughout 2025 and 2026 and marks the strongest performance recorded by any of the group’s term loan facilities in nearly five years.

Secondary Market Performance Outpaces Industry Benchmark

Since the beginning of 2026, the loan has appreciated by approximately 500 basis points, resulting in a reduction in yield of around 1.3%.

Over the same period, the facility has outperformed the European Leveraged Loan Index by roughly 400 basis points, highlighting growing investor appetite for THG’s debt and improving sentiment towards the company’s credit profile.

The performance reflects increasing confidence among lenders and institutional investors in the group’s financial outlook and strategic direction.

Stronger Credit Perception Could Improve Financing Options

The move above par value is a notable indicator of market confidence and may enhance THG’s future access to capital.

A stronger trading performance in the debt market can improve funding flexibility, potentially reducing borrowing costs and strengthening the company’s position should it seek refinancing or additional financing opportunities in the future.

Management views the performance as evidence of the positive reception received from investors following recent operational and trading progress.

Financial Recovery Continues Despite Ongoing Challenges

While market sentiment towards the company’s debt has improved, THG’s broader financial outlook remains constrained by ongoing profitability and cash flow challenges.

Although earnings improved during 2025, the group continues to report negative operating profitability, while both operating cash flow and free cash flow remain negative. Leverage levels also continue to be relatively elevated.

Technical indicators provide some support, with momentum measures remaining positive. Valuation metrics appear broadly moderate based on earnings multiples, although the absence of a dividend limits the stock’s appeal for income-focused investors.

More About THG

THG PLC is a global e-commerce and consumer brands group headquartered in Manchester. The company operates through its THG Beauty and THG Nutrition divisions, serving customers across international markets.

THG Beauty manages major online retail platforms including Lookfantastic, Dermstore and Cult Beauty, offering products from more than 1,000 third-party brands alongside its own portfolio. THG Nutrition is led by Myprotein, one of the world’s largest online sports nutrition brands, and provides a wide range of health, wellness and performance products through both direct-to-consumer and wholesale channels.