Icahn Capital, a holder of a sizable position in Revlon’s $342.8 million 5.75% unsecured notes due 2021, has not tendered into the proposed exchange offer that would enable the cosmetics retailer to avoid Nov. 16
springing maturities on its bank debt, according to sources. Jefferies, as dealer manager for the exchange, has engaged Icahn Capital on the company’s behalf, the sources said.
Continue reading for the Americas Core Credit by Reorg team's update on Revlon, and request a trial to access our coverage of thousands of other stressed/distressed debt situations.
The early tender deadline for the exchange is Thursday, Nov. 5, at 11:59 p.m. ET, and the tender offer expires Nov. 10 at 11:59 p.m. ET.
The exchange was originally launched Sept. 29 and is aimed at avoiding Nov. 16 springing maturities on the company's $912 million term loan due 2023 and the $250 million ABL revolver due September 2021 that would be triggered if its liquidity does not exceed $200 million in excess of the 2021 notes outstanding at that time. It was extended twice amid lackluster participation before being amended. The company has made efforts to solicit participation from retail bondholders, including
setting up a website,
RevlonBonds.com.
Revlon
announced yesterday, Oct. 29, that an ad hoc group of noteholders
organized with Stroock as legal advisor and Greenhill as financial advisor agreed to tender its notes, bringing the participation level to about $94 million, or 27.4%. Icahn Capital is not part of the ad hoc group, the sources said.
The 2021 notes last traded in size on Oct. 23 at 27.25, down from 32.625 on Sept. 22, according to TRACE.
Under the currently proposed exchange terms, holders who tender their notes before the early deadline will
receive either 32.5 cents in cash, or a combination of 25 cents in cash and their pro rata share of $50 million of ABL FILO term loan and $75 million Brandco second lien term loan. The company eliminated a
minimum participation threshold of 95% and added a most favored nation provision, which requires Revlon to offer participating noteholders “substantially equivalent” consideration offered to any noteholder that enters any agreement with the company following the tender.
As a condition to closing the exchange, an amendment to the ABL facility requires Revlon to have “as-adjusted liquidity” of at least $175 million plus the post-transaction balance of the 2021 notes. As of Oct. 16, the company’s “as-adjusted liquidity” was about $308 million, including $267 million of unrestricted cash and $57 million of “excess availability” under the amended credit agreement.
Representatives for Revlon and Greenhill declined to comment. Macandrew & Forbes, Icahn Capital, Stroock and Jefferies did not immediately respond to requests for comment.
--Harvard Zhang