Nyrstar Nv
Avenue, Marathon, Monarch, Warwick Organize After Buying Into Nyrstar 2019, 2022, 2024 Bonds, Say They Control About 40% of Bonds; Consider Litigation Options
Thu 11/29/2018 12:57 PM
Relevant Items:
Reorg Analysis
Debt Documents
Debt Explained 2024 Report
Debt Explained 2019 Report
Avenue, Marathon, Monarch and Warwick Capital have formed a bondholder group after buying some of Nyrstar’s 2019, 2022 and 2024 notes, sources told Reorg. The group, which is said to control about 40% of the debt, is working with Milbank and Moelis as it prepares for talks with the Belgian zinc miner about upcoming maturities.
The group bought Nyrstar’s bonds before the company signed a binding term sheet with shareholder Trafigura for a $650 million committed working capital facility. The group is considering legal action against the company as the facility ranks senior to the bonds, sources said. Bondholders are also looking at the contracts that Trafigura has with Nyrstar arguing that many of them are below market rates.
Other investors who bought after Nyrstar announced its new facility may join the group.
Nyrstar is working with Freshfields and Morgan Stanley, while Nyrstar’s largest shareholder Trafigura appointed Allen & Overy and Rothschild as advisors.
Avenue and Warwick declined to comment. The other funds and the company did not respond to Reorg’s queries.
Some investors consider 24.6% stakeholder Trafigura's move as a way to position itself for a restructuring. The size of the working capital facility may indicate that banks would like to step away from the company, sources told Reorg previously.
The $650 million facility replaces a $250 million working capital facility agreement with Trafigura. It incorporates a right to participate for up to 50% of any future financing or recapitalization arrangements entered into by Nyrstar for two years after the date when the new facility becomes effective.
About €40 million to €60 million of Nyrstar’s 2019 bond changed hands in the high 40s in recent weeks as the bond moved from par bondholders to distressed investors.
Nyrstar’s capital structure is below:
The group would need 50% in cross-holdings to gain a majority blocking stake in the bonds. Par bondholders have not yet organized, another source said. Under the 2019, and 2024 bond documentation (page 276) waivers, amendments carry a majority voting threshold of 50% with other items requiring a supermajority of not less than 90%, according to Debt Explained, Reorg’s sister company. The Debt Explained analysis of the 2019 and the 2024 reports is HERE and HERE.
The matters needing supermajority vote under the 2019 and 2024 documentation are:
Reorg Analysis
Debt Documents
Debt Explained 2024 Report
Debt Explained 2019 Report
Avenue, Marathon, Monarch and Warwick Capital have formed a bondholder group after buying some of Nyrstar’s 2019, 2022 and 2024 notes, sources told Reorg. The group, which is said to control about 40% of the debt, is working with Milbank and Moelis as it prepares for talks with the Belgian zinc miner about upcoming maturities.
The group bought Nyrstar’s bonds before the company signed a binding term sheet with shareholder Trafigura for a $650 million committed working capital facility. The group is considering legal action against the company as the facility ranks senior to the bonds, sources said. Bondholders are also looking at the contracts that Trafigura has with Nyrstar arguing that many of them are below market rates.
Other investors who bought after Nyrstar announced its new facility may join the group.
Nyrstar is working with Freshfields and Morgan Stanley, while Nyrstar’s largest shareholder Trafigura appointed Allen & Overy and Rothschild as advisors.
Avenue and Warwick declined to comment. The other funds and the company did not respond to Reorg’s queries.
Some investors consider 24.6% stakeholder Trafigura's move as a way to position itself for a restructuring. The size of the working capital facility may indicate that banks would like to step away from the company, sources told Reorg previously.
The $650 million facility replaces a $250 million working capital facility agreement with Trafigura. It incorporates a right to participate for up to 50% of any future financing or recapitalization arrangements entered into by Nyrstar for two years after the date when the new facility becomes effective.
About €40 million to €60 million of Nyrstar’s 2019 bond changed hands in the high 40s in recent weeks as the bond moved from par bondholders to distressed investors.
Nyrstar’s capital structure is below:
The group would need 50% in cross-holdings to gain a majority blocking stake in the bonds. Par bondholders have not yet organized, another source said. Under the 2019, and 2024 bond documentation (page 276) waivers, amendments carry a majority voting threshold of 50% with other items requiring a supermajority of not less than 90%, according to Debt Explained, Reorg’s sister company. The Debt Explained analysis of the 2019 and the 2024 reports is HERE and HERE.
The matters needing supermajority vote under the 2019 and 2024 documentation are:
- Impair the right of any holder to receive payment of principal of and interest on such holder’s notes on or after the due dates;
- Impair the right to institute suit for enforcement of payment on or after the stated maturity;
- Make any change in the provisions of the indenture relating to waivers of past defaults;
- Make any change to the amendment provisions that require super-majority/unanimous consent of noteholders;
- Make any note payable in a different currency than stated in the note;
- Reduce the amount of notes that must consent to an amendment, supplement or waiver;
- Reduce the premium payable upon repurchase of any note or change the time at which any note may be repurchased under the change of control or sale of assets and subsidiary stock provisions at any time after the obligation to repurchase has arisen;
- Reduce the principal or change the stated maturity of the notes;
- Reduce the rate of or extend the time for payment of interest on any note;
- Release any guarantor from any of its obligations under its note guarantee or the indenture, except in accordance with the terms of the indenture and the intercreditor agreement;
- Waive a default/event of default in the payment of principal, interest, additional amounts or premium (except in the case of a rescission of acceleration of the notes by the holders of at least a majority in aggregate principal amount of such notes and a waiver of the payment default that resulted from such acceleration); and;
- Waive a redemption payment with respect to any note.
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