Yet the CB traded up to the 99 area in the secondary market, at a time when the Australian diversified investment company's share price fell almost 22%. Seven Group’s share price, at AUD 16.91 each, is well below the CB’s initial conversion price at AUD 24, based on Dealogic data. With the paper due for put redemption in January 2023, there is market chatter that the refinancing is imminent, the sources said.

For the year ended 30 June, Seven Group had net debt of AUD 5.4bn and operated at net leverage of 3.32x net debt/ EBITDA. The group has been optimizing its capital structure since its acquisition of Boral in July 2021, while it still has about AUD 2.3bn in undrawn facilities and cash.

In July, Seven Group repurchased USD 300m of its 144A notes maturing in May 2028 at a 3.4% discount, delivering USD 11m in annual interest savings.

Last month, the Australian Financial Review reported that Seven Group was working with Bank of America and Macquarie to "review its options" The terms and structure of a refinancing remain unclear, but the company is working with BofA on restructuring the note into an exchangeable note of around the same size as the existing paper, the first source following said. 

As the expected size of the exchangeable bond (EB) is AUD 350m, the full exchange into Seven West Media [ASX:SWM] (AUD 260m) looks out of the picture.

While Seven launched a hostile bid for Boral [ASX:BLD] last year to reach a 69.9% stake, which made it an unlikely underlying stock for the EB, the first source noted the building and construction materials supplier would underlie the EB.

This is contrary to an analysis piece by this news service earlier highlighting Beach Energy [ASX:BPT] as the likely underlying asset for the EB. Seven’s stake in Beach is worth AUD 1bn, and it was reported by The Australian last November that Seven was considering a 30% stake sale.

Seven Group’s investor relations officials couldn’t be reached for comments after business hours.