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Billionaire Andrea Pignataro’s heavily indebted fintech empire is under increasing pressure in credit markets, as concerns over AI’s impact on software companies hit one of Europe’s largest sellers of junk bonds.
The sell-off in bonds issued by Ion Group, a debt-fuelled roll-up of financial data companies including Mergermarket, Fidessa and Dealogic, has accelerated in the past week, wiping hundreds of millions of dollars from the market value of a more than $10bn debt stack. Ion’s holding company has another $2.5bn of private debt.
Some of the group’s debt has tumbled in price, with one bond falling to 86 cents on the euro on Tuesday from about 96 cents in mid-January. The price drop means that some of Ion’s debt now comes with a yield of more than 10 per cent.
Pignataro’s woes have drawn parallels with Patrick Drahi, the Franco-Israeli entrepreneur who has repeatedly battled with creditors amid strains at his debt-laden telecoms empire.
“Ion is over eight times levered, has a Drahi-like sponsor and is cutting costs aggressively . . . and AI means the tech is much more replaceable,” said one high-yield bond trader.
As well as selling Ion’s debt, hedge funds have racked up bets that the group will fail to meet its repayment obligations, resulting in short positions against almost 15 per cent of one Ion bond, according to S&P data.
Ion did not immediately respond to a request for comment.
Concerns have risen in the past week over the potential impact of AI on software and financial data businesses, as investors worry that new coding tools, such as those released by AI group Anthropic in recent weeks, will disrupt their business models.
Ion’s sell-off comes after a number of Europe’s largest issuers of high-yield debt, including part of Drahi’s Altice empire and Paul Coulson’s Ardagh, came under pressure as interest rates rose following the Covid-19 pandemic. This forced some of them to reach restructuring deals with creditors after months of tough negotiations.
Ion, founded by the former Salomon Brothers bond trader in 1999, grew rapidly in the past two decades through a series of acquisitions financed by cheap debt during the era of low interest rates. Pignataro’s ownership of the group has made him one of Italy’s richest men and one of the largest players in Europe’s market for junk debt.
But investors have become increasingly worried about Ion’s indebtedness, particularly in a higher interest-rate environment.
Ion’s leverage — its ratio of net debt to earnings before interest, tax, depreciation and amortisation — has risen to more than eight times, as Pignataro continued his buying spree. He acquired Italy’s Cerved, a credit rating and financial analysis agency, for more than €2bn in 2021, then in 2024 Ion bought Prelios SpA, an Italian alternative asset manager and real estate services provider, for €1.35bn.
As it acquired more businesses, Ion became known for aggressively cutting costs.
Last year, it completed a $7bn refinancing, replacing debt issued by several different entities with newly issued bonds and loans consolidated between co-borrowers Ion Platform Finance US and Ion Platform Finance SARL.
“That deal was never loved when it came, and failed to trade meaningfully above par,” said one high-yield credit investor. “Now Ion is in the crosshairs of a software disruption, on top of its higher leverage.”