Distressed Debt


Highlights of our extensive coverage and analysis of the largest stressed and distressed debt, loans, funds, companies and the distressed debt market across the Americas, EMEA and Asia. Our intelligence, reporting and analysis also includes information on distressed trading and investing written specifically for investment managers, investment bankers, legal professionals and corporate professionals.

Analyze and Forecast Cash Flow with Aggredium

To analyze and forecast cash flow, you normally need to manually aggregate data points including cash flow from operations, cash flow from investing, and cash flow from financing. These data points are fundamental for both private and public sub-investment grade companies and they may be difficult to find without a proper aggregation tool. Accrual accounting and cash accounting, plus a company’s operations/net sales ratio, free cash flow, and comprehensive free cash flow coverage are all necessary statistics and figures used in determining your ability to analyze and forecast cash flow. Recently, Reorg acquired Aggredium which provides our subscribers with fundamental data on high-yield bonds and leveraged loans through a searchable database. This comprehensive database features high-speed scraping and updating tools used for gathering and publishing changes to loan and bond data.


Aggredium’s standardized, aggregated, proprietary data enables subscribers to analyze and forecast cash flow and screen a company’s universe using financial data. Founded in 2017 and acquired by Reorg in 2021, Aggredium was designed and built by experienced international analysts whose shared goal was to deliver accurate financial data combined with state-of-the-art technology and analytics to empower business professionals to make superior investment decisions. The Aggredium calendar, available only to Reorg subscribers, enables users to view upcoming events by working day, as well as click into event details and add them to their own calendar. Another important feature in the Aggredium database that helps users analyze and forecast cash flow is our reported view and standard view. The reported view allows users to access complete data as reported with direct traceable links to all source information whereas the standard view provides users with a unified list of metrics shown in a standardized format with transparent links to each source. To learn more about how to analyze and forecast cash flow with Aggredium download our brochure here and visit our product page here. Also feel free to request a trial here to experience the power of our platform.

 

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On this week’s Americas Core Credit podcast our team discusses a variety of sub-investment grade credits including PROMESA, Limetree Bay, Washington Prime Group, Pipeline Foods and more. On PROMESA, our experts discuss Puerto Rico’s preview of the settlement with UCC as well as Judge Swain’s preliminary ruling and DS objections. We also discuss Limetree Bay’s chapter 11 filing which occurred on the same day as the EPA complaint, Judge Iscur’s conditional approval of Washington Prime’s disclosure statement subject to inclusion of a secondary toggle, plus KERP bonuses in LSC communications overruled on appeal and Pipeline Foods’ first day hearing. Listen to the full episode on SoundCloud here: https://soundcloud.com/user-627041409/americas-core-credit-podcast-promesa-limetree-bay-washington-prime-and-more-jul-16-2021

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Reorg’s expansion into the municipal market uncovers opportunities…

Written by Seth Brumby in New York | Reorg’s expansion into the municipal market continues to uncover opportunities while forecasting major credit events. Readers took a keen interest in coverage of Limetree Bay, a distressed situation that grew out of municipal coverage of the U.S. Virgin Islands. The Reorg municipal and Americas editorial teams joined resources over the past few weeks, producing a series of scoops on advisor mandates that foreshadowed the refinery’s eventual chapter 11 filing this week in the Southern District of Texas.

Advisor mandates have long been an important leading indicator of an impending transaction. With that in mind, Reorg continues to uncover future distressed situations for its municipal readership including advisor mandates for Foxwoods Resort Casino and American Dream Mall. Both situations involve billions in municipal debt that will likely restructure in the coming months.

Further out on the distressed timeline is a group of continuing care retirement communities (CCRCs) that have tapped the market in recent months amid a growing glut of defaults in the industry. While ostensibly robust credits such as Vicar’s Landing tapped the primary market to finance expansions, this post-pandemic group of CCRCs could provide a crop of distressed opportunities for investors over the coming months and years. Recent and looming defaults for CCRCs such as Buckingham Senior LivingH-Bay Industries and American Eagle all point toward a near-term credit cycle. Sign up for weekly updates here.

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Municipal Credit Trends Webinar, Retirement Communities

Featuring a discussion on municipal credit trends across the continuing care retirement community industry in the Americas, our municipals experts Patrick Mohan and Seth Brumby will be conducting a webinar on Thursday, July 22 at 11:00a.m. EST. The industry has seen a wide range of outcomes, including Vicar’s Landing’s recent borrowing of $84.3 million in connection with the expansion of its Ponte Vedra Beach community, the chapter 11 filings of The Harborside and The Buckingham, and defaulted credits that are still exploring options like Glen Hope Harbor and American Eagle. 


The team will also discuss how Covid-19 has affected the industry, from advanced Medicare payments, to bond covenants, including occupancy rates, days’ cash on hand and debt service coverage ratios. Register here: https://reorg.zoom.us/webinar/register/3716257539343/WN_0IhAuDH7R7Cb8UxcbJ6oig 

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Laredo Petroleum Senior Notes, No Additional Secured Debt

Analyzing the new Laredo Petroleum senior notes, our Americas Covenants team takes a deep dive into the company’s low leverage ratio and their inability to incur any additional secured debt. The energy company, which focuses on the acquisition, exploration and development of oil and natural gas properties in the Permian Basin, acquired Sabalo Energy on July 1, 2021 and entered into their sixth amendment to their credit agreement on May 7th.


Based on these capital structure changes, our Americas Covenants team came to a few conclusions about the Laredo Petroleum senior notes as well as the company’s cash sweep, financial covenants, annualized EBITDAX, debt and lien payments, restricted payments, investments and note redemptions and their agent clawback provisions. Read our full analysis of the Laredo Petroleum senior notes and other covenant conclusions here: https://reorg.com/new-coverage-despite-low-leverage-ratio-laredo-petroleum-cannot-incur-any-additional-secured-debt/ 

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Brazos Restructuring Webinar | Register Now | Reorg Americas

Conducting a webinar discussing the Brazos restructuring situation, our Americas Core Credit experts will be taking a deep dive into the company’s financials on Wednesday, July 7, at 10 a.m. ET. Brazos is the only electric cooperative to file for bankruptcy after the Storm Uri disaster and related market dislocations, and the company did so in part to shield its member distribution cooperatives from immediate pass-through of Storm Uri charges. 


During the webinar, our coverage team will provide an overview of the Brazos Electric chapter 11 case, sources of uncertainty and outstanding issues, including available legislative tools, claim reconciliation and priority questions. We will also discuss potential restructuring paths for Brazos in light of these and other issues in the case, plus the team will conduct a Q&A session at the end of the webinar. Don’t miss out, register here: https://reorg.zoom.us/webinar/register/1316245464986/WN_FsKweVh0Rfy_7UfShKNa0g 


This webinar focused on the Brazos restructuring is a part 2 to our Texas Winter Storm webinar which was held in April 2021. You can view the replay of that webinar here: https://reorg.com/resources/webinars/texas-storm-webinar/ 

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Chapter 11 filings are picking up…

On the Reorg Americas team, we’ve seen a pickup in chapter 11 filings in the past few weeks. Notable new filers include mall REIT Washington Prime and SoftBank-backed tech-oriented construction company Katerra. Another new filer – Krygyz gold miner Kumptor – is bringing fascinating questions of international comity and the reach of bankruptcy court powers to Judge Judge Lisa G. Beckerman in New York.

Reorg continues its expansion into municipals coverage, and there we’ve seen some recent chapter 9 filings from Western Community Energy and the Texas Student Housing Authority. Meanwhile the endgame for Puerto Rico’s long-running Title III proceedings is coming into view, with battle lines being drawn for a confirmation hearing, the timing of which is not pinned down but looks to be late this year. (more…)

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Cruise Shutdown Litigation Coverage (June 2021)

Discussing the cruise shutdown litigation situation between the CDC and 3 states including Florida, Alaska and Texas, our Americas Core Credit experts dive deep into the Conditional Sailing Order, or CSO, where states are comparing the cruise shutdown to a ban on all ‘sexual intercourse’. Our Americas Core Credit team also discusses the mandatory limits for cruises being lifted on July 18th absent further ‘scientific evidence’. The CSO and related orders will become “non-binding,” according to direction from Judge Merryday, like CDC Covid-19 “guidance” aimed at other similar industries including the airline, railroad and hotel industries. The cruising halt caused major financial complications for the state of Florida as well as residents of the state including the necessity of approximately $20M in unemployment benefits to cruise industry workers, the loss of over $100M in income for the state’s ports and a loss of approximately $82M in sales tax revenue.


To read our Americas Core Credit team’s full analysis of the cruise shutdown litigation click through here: https://reorg.com/cruise-litigation-coverage/

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Greenland Holdings Sounds Out Interest in RMB 1.5B to RMB 2B-Equivalent USD Private Bond Deal

Another exclusive from our Asia Core Credit team is about Chinese property developers resorting to lightly-regulated private bond issuance to circumvent China’s “three red lines” policy. For Greenland, which has strong ties with the Shanghai municipal government, to try to tap private investors and then pull the deal due to high cost, shows the market is tight with riskier borrowers. The team also covered last week Yuzhou Group’s attempted private deal. Click through to read more on this industry trend in the onshore real estate market: https://reorg.com/greenland-holdings-sounds-out-private-bond-deal/

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Iconix Brands Going Private Acquisition (Americas Podcast)

On this week’s Americas Core Credit weekly podcast our expert team of covenants analysts, including Richard Barbour and Julian Bulaon, discuss Iconix Brands going private acquisition in detail.  Iconix Brands’ recently announced going private acquisition by Lancer Capital and the change of control implications under their debt docs is being structured as a two step merger. In broad strokes, the purchaser commences a tender offer to acquire all outstanding shares of Iconix’s common stock, and in this case that’s for $3.15 per share in cash. Assuming that the shares that are tendered in the offer and those held by the company constitute a majority, the remaining shares are acquired in a backed-in merger at the same cash price as the initial tender offer. The Iconix Brands going private acquisition, in terms of the shareholder vote, is implicitly the same as the initial tender offer in this case. 


Click through to listen to the full podcast on Spotify, iTunes or SoundCloud for our discussion between Reorg Covenants analysts Julian Bulaon and Richard Barbour on Iconix Brands, including their recently announced going-private acquisition by Lancer Capital and the change of control implications under their debt docs as well as our viewpoints on Washington Prime Group, Mallinckrodt, Dawn Acquisitions, and Puerto Rico.

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