High Yield Bonds


Intel and searchable data on high-yield bonds for investors, lawyers and other restructuring professionals to incorporate into their daily workflows and research. Our coverage breaks down the high yield market through analysis and reporting on high-yield bonds, high-yield debt, high-yield trading, bond investing and more.

Recent Reorg Podcasts
Fri Feb 3, 2023 12:00 pm Distressed Debt  High Yield Bonds  Leveraged Finance

Every week Reorg reporters and financial and legal analysts provide recaps, previews of what’s to come, interviews with experts and deep dives on topical credit situations. We focus on issues affecting and impacting distressed debt, leveraged finance, direct lending, high yield, municipals, covenants, private credit, and more.

You can listen to recent podcast episodes below, and follow Reorg on Apple Podcasts, Google Podcasts, SoundCloud or Spotify to access all past and future episodes.

Reorg Radio Europe: Primary Highlights; Maxeda Cash Flow Analysis; GenesisCare Updates; Adler Pelzer
Jan. 31, 2023. Listen here.

The Reorg Primary View: Debt Instruments and Soccer Teams in Brazil
Jan. 30, 2023. Listen here.

Reorg Radio Americas: Serta Simmons, Heritage Power Chapter 11; Party City, DISH Network
Jan. 27, 2023. Listen here.

Reorg Radio Europe: What Next for Adler?
Jan. 25, 2023. Listen here.

Reorg Radio Europe: Primary Highlights; Orpea Second Conciliation; Issuers With Near-Term Maturities
Jan. 24, 2023. Listen here.

Reorg Radio Americas: Recap, Look Ahead and Latest Episode From The Reorg Primary View
Jan. 24, 2023. Listen here.

The Reorg Primary View: Cryptocurrency Bankruptcy and Regulation
Jan. 23, 2023. Listen here.

The Reorg Primary View: Bernstein Shur’s Bob Keach Discusses Subchapter V With Reorg’s Harvard Zhang
Jan. 18, 2023. Listen here.

Reorg Radio Europe: Primary Highlights; Matalan Recapitalization Plan; Adler Group Restructuring
Jan. 17, 2023. Listen here.

Reorg Primary View: 2022 Recap, Muni High Yield Hot Spots and Expectations for 2023
Jan. 17, 2023. Listen here.

Reorg Radio Americas: Bed Bath & Beyond, Cineworld Group, Venator Materials, FTX
Jan. 13, 2023. Listen here.

Reorg Radio Europe: Matalan, Orpea, Telepizza, Vivion
Jan. 10, 2023. Listen here.

The Reorg Primary View: The Private Debt Secondary Market
Jan. 9, 2023. Listen here.

Reorg Radio Americas: Avaya Inc., Clovis Oncology Inc., FTX, AIG Financial Products Corp.
Dec. 16, 2022. Listen here.

The Reorg Primary View: The Importance of Buying Assets and Cash Flows…
Dec. 12, 2022. Listen here.

Reorg Radio Americas: Endo International, AMC Entertainment Holdings, Reverse Mortgage Funding
Dec. 9, 2022. Listen here.

Reorg Radio Europe: Primary; Frigoglass Notes Restructuring Plan; Convene Restructuring Proposal
Dec. 6, 2022. Listen here.

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Year in Review — Americas Webinars 2022

Throughout the year, Reorg hosts webinars bringing together industry professionals to discuss themes in the performing, distressed, restructuring and post-reorg credit markets. Reorg’s webinars cover topical credits and industry updates. They’re produced by our reporters and analysts with selected external guests.

Americas Webinars from 2022:

  1. Primary in the Eye of the Storm: Challenges and Opportunities in Leveraged Finance in a Downturn
  2. Hot Topics in Crypto Winter
  3. Winter Came for Covid-Era Darlings? – Distress in Crypto and Tech
  4. Bausch’s Remedies for Potential Patent Defeat & Creditor Angst Over B+L Spin
  5. Puerto Rico’s Restructuring Endgame and Beyond
  6. Revlon – Chapter 11 Cases and Creditor Disputes
  7. CLO Considerations for Distressed Investors
  8. Diebold Nixdorf: Can Significant Unencumbered Assets Overcome Massive Maturity Wall?
  9. Talen Energy Chapter 11 Filing
  10. The Texas Two-Step: LTL J&J Chapter 11 and Likely Future Filings
  11. Samarco – Testing Brazil’s Bankruptcy Reform
  12. Loan Market Trends in 2021 from Americas Covenants
  13. No Surprises Act Rollout: Implementation and Litigation Challenges Ahead

If you would like to be panelist on our upcoming webinars, please contact marketing@reorg.com, and if you would like to be notified for the upcoming webinars, sign up for Reorg on the Record.

Request a trial here.

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Fri Dec 23, 2022 4:11 pm Distressed Debt  High Yield Bonds

In this column, Reorg editors and reporters take turns writing about trends in high yield, distressed debt, restructuring and bankruptcy in major Asian markets including China, South Asia and Southeast Asia. Any opinions or other views expressed in this column are the author’s own and do not necessarily reflect the opinions or views of Reorg or its owners. Send any question or concern you may have to asiaeditorial@reorg.com.


Metals-to-mining company Vedanta Resources Ltd. (VRL) needs to come up with a quick, smart and sustainable solution to tackle its large and closely spaced debt maturities, estimated at about $4 billion for the next fiscal year. Bondholders have been pressuring VRL since July 2021, demanding that it pare its debt using dividends from Indian opcos which have benefited from the rally in zinc and aluminium prices.

But Vedanta is well known for structuring astute last-minute deals to keep its refinancing game on, and is yet again keeping investors on edge, as they await the big reveal on its plans to meet debt obligations which are rapidly closing in. The difference this time is that investors have begun questioning Vedanta’s ability to make timely decisions, and to understand and manage the complex deal negotiations needed to arrange funding from multiple sources at the same time as it deals with high-level management changes.

Significantly, the company has been missing windows available to de-lever using dividends.

In July 2021, without discussions with its bondholders, Vedanta sought to raise the debt cap from $3.6 billion to $5 billion at step-down subsidiaries Twinstar Holdings Ltd. and Welter Trading so that it could raise additional debt for refinancing. Bondholders pushed back on the proposal, which would have led to dilution of collateral, and instead the company cut its debt using dividends.

The $1.7 billion dividend received last fiscal year, upstreamed from Vedanta’s Indian listco Vedanta Ltd. (VDL), did go towards debt servicing, including interest payments. But debt was not ultimately pared as Vedanta simultaneously took on additional debt to purchase a further 14.6% stake in VDL through a voluntary open offer, to plug dividend leakage to public shareholders.

The company has stated that it has reduced debt due in fiscal year 2023 by $1.4 billion. But to boost investor confidence it needs to announce a chunky dividend to pare its debt sufficiently in one go to avoid any near-term repayment stress. That would simultaneously prove management’s credibility and its intent to de-lever. Vedanta’s management, though, still seem keen to reserve the dividend strategy for a later date, and are instead focused on raising bank loans to meet refinancing needs.

The problem with that strategy is that the company’s reputation among lenders took a beating after its corporate family and senior unsecured bond ratings were downgraded by Moody’s on Oct. 31. Again, Vedanta has to take the blame for digressing from its deleveraging plans at the last minute, after it decided not to proceed with a tender offer in October for its $400 million 8% bonds due April 2023 and $500 million 7.125% bonds due May 2023.

Moody’s in an Aug. 3 report had flagged a downgrade risk if Vedanta Resources was unable to arrange long-term funds to refinance its bonds due 2023 by Oct. 31, and the company told multiple investors it was considering a tender offer for the due 2023s by mid to end-October. Instead, it decided to use around $250 million in low-cost loans from state-owned banks to repay upcoming bank debt, resulting in an immediate downgrade from Moody’s.

The damage post the downgrade might have been more limited had Vedanta not gone ahead and discontinued its ratings engagement with Moody’s. This has resulted in bank lenders conducting additional due diligence, causing delays in closures of needed loan financings.

The tender offer required $300 million to $400 million, which could have easily come from dividends and prevented a hit on both Vedanta’s credit rating and its perception in the market. The events should teach Vedanta’s management that a strategy of constantly cutting corners is penny wise but pound foolish.

The need to present a consistent and sustainable strategy to investors is more important against the backdrop of recent high-profile changes in Vedanta’s finance team. In April 2021, Vedanta’s CFO GR Arun Kumar left, after eight years with the group during which he led deals including the merger of Vedanta Ltd. and Cairn India. More recently, in November, Vedanta appointed Anupam Jindal as its new treasury head. Jindal previously served as CFO at Sterlite Technologies Ltd. Jindal replaces Divya Goyal who had been Head, Treasury and Corporate Finance at the group, as reported.

Developing a deep relationship and maintaining constant communication with investors is vital to Vedanta, given its heavy reliance on bond debt. Investors now face the need to build new connections with key personnel at the firm due to management churn, and new incumbents need to show that they understand the company’s working over the decades.

Vedanta can steer through its debt maturities until March 2023 without a hiccup. Its trouble might begin if it is unable to close the loans with the state-owned banks as anticipated.

There are still a few steps it can take to get cash to meet its debt repayments. One is the sale of its steel business, but Vedanta has stated that it does not want to sell at this moment. Second, the company could consider selling a stake in VDL, but given the effort Vedanta Resources has taken to boost its stake in VDL to plug cash leakage, dilution of its equity holding again is unlikely to be a favored option.

For now, Vedanta needs to liaise with its banks more effectively to ensure a robust loan pipeline is in place to supplement dividends from opcos, and tackle upcoming debt maturities. Keeping its bondholders updated on its plans – and not diverging from them at the last minute – would bolster investor confidence. Metal prices are still favorable, though commodities move in cycles, and are always susceptible to external shocks.

Bearing that in mind, the company should try and make use of dividends as much as possible to bring down its debt. Most importantly, Vedanta should stop trying to cut corners and wait for a favorable window to deleverage. With few easy options on the table, the time to act is now.

–Malvika Joshi, India Editor

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Reorg on the Record:Good news for investors, double-digit high yield is back…
Fri Dec 16, 2022 5:39 pm High Yield Bonds

If you’re not already receiving Reorg on the Record, sign up here: https://reorg.com/resources/reorg-on-the-record/


In these last few weeks of 2022 some European companies are taking advantage of a window in the primary market to issue debt to refi 2024, 2025 maturities or finance acquisitions. In the most telegraphed recession ever, management teams have the benefit of operating with some level of visibility and want to avoid surprises, hence dealing with maturities is key.

The good news for investors is that double-digit high yield is back, House of HR will likely raise its senior secured bonds at over 10% yield, Parques Reunidos is pricing its TLB3 at Euribor+525 bps with 96.5 OID. Funds across the pond seeking double-digit returns are becoming increasingly interested in EMEA senior secured paper in safe names like telecoms/cable.

Other issuers are being forced to look at alternative ways of dealing with maturities. Pronovias and Takko creditors have started negotiations again as 2023, 2024, and 2025 maturities loom. Food Delivery Brands, the old Telepizza, is also back negotiating with creditors.

In this last 2022 iteration of Reorg on the Record, looking back at the past 11 months in the distressed market, we have seen an increase in activity for legal and financial advisors pitching and getting mandates but overall still not many full-blown workouts as many companies dealt with their maturities in the past years leaving only a few stragglers out in the cold. In the loan market, covenant-lite docs combined with whitelists mean trading activity is frustrated with less pressure on management to act when companies underperform. With recession biting European economies, more opportunities for putting money to work and/or advising are expected in 2023 especially among small to medium-sized companies with less access to public capital markets.

Regards,
Mario Oliviero


Our European editorial teams are delivering the most in-depth data, analysis and reporting on thousands of credits that are either performing, stressed, distressed, going through restructuring or post-reorg. Check out these recent articles.

Hilding Anders
Hilding Anders was hit by a cyberattack in October that disrupted production and the Sweden-based mattress maker’s ability to ship and invoice orders. As a result, sales fell 18.2% year over year in the period while EBITDA halved. Liquidity remains tight but is set to rise according to the group’s 13-week cash flow forecast, however the group’s planned sale and leaseback of its Belgian site has been delayed, sources said. » Continue Reading

Intrum
Swedish credit management company Intrum issued €450 million senior notes due 2028 at a 10% yield to maturity, to partially redeem the existing €900 million 3.125% senior notes due 2024. Existing Intrum credit investors, who remain comfortable with the medium to long-term fundamentals of the business, could pick a 1% premium over the group’s existing notes maturing between 2025 and 2027 by buying into the new issue. Instead, prospective investors may look to the short end of the yield curve for a more attractive investment as the 86 bps premium of the 2028 notes above the 2025 notes may not be enough in compensating for the additional duration risk. » Continue Reading

EMEA Covenants Monthly: November
The average super senior debt headroom under the credit facilities basket available to all high-yield bonds issued in the last twelve months is 26% of EBITDA. Our data-driven analysis shows that two-thirds of high-yield bonds issued in the last 12 months have below average headroom (26% of EBITDA) of additional super senior capacity. Just under a fifth (19%) had capacity between 27% and 40% of EBITDA while a small minority (15%) contained over 40% of additional super senior debt capacity. » Continue Reading

Pronovias
Law firm Kirkland & Ellis is advising Spanish wedding dress maker Pronovias in debt talks, sources told Reorg. Latham & Watkins is working with a group of creditors to Spanish wedding dress retailer Pronovias, which has an RCF maturing in March 2023, sources told Reorg. The BC Partners-owned company also has €215 million of first lien term loan maturing in 2024 and €80 million second lien due 2025. » Continue Reading

Webinar: On Nov. 17, Reorg hosted another episode of our deep dive webinar series, this time on the outlook for the distressed debt and restructuring market in Germany. With German corporates facing a winter of high gas prices, subdued consumer confidence and rising interest rates, the panel discussed what opportunities and challenges investors and restructuring professionals can expect. » Watch the replay

Podcast: Each episode of Reorg’s weekly EMEA Core Credit podcast series features detailed discussion on issues and companies across the credit lifecycle. This week’s podcast includes discussions of German real estate company Adler Group’s restructuring proposal, U.K. high street lender Metro Bank, Spandex producer Lycra’s refinancing talks; and highlights in the primary market this week. » Listen here

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Replay — China’s Regulatory Stimulus, Impact on Real Estate Sector, HY
Fri Dec 16, 2022 5:00 pm Financial Restructuring  High Yield Bonds

Since the second week of November, the Chinese government has released a slew of new policies and initiatives aimed at expanding access to financing for privately held real estate developers. Policy highlights include the so-called Second Arrow program to provide up to RMB 250 billion total financing and 16 measures from the central bank and the China Banking and Insurance Regulatory Commission for supporting real estate companies. Asia’s high-yield market rallied following the unveiling of the policies, with China real estate bonds leading the rise.

Will the new policies end China’s real estate crisis? How much will they help lift the industry out of its recession? Could this be the turning point people were hoping for? And how long will the exuberance last? In this webinar, Reorg’s China editorial team shared their take on the situation. 

Panelists:

  • Katherine Shi, Reorg China Editor
  • Anna Zhang, Reorg Senior China Reporter

Shasha Dai, Reorg Managing Editor, China (Moderator)

Watch the replay here.

Other Asia Webinars from 2022:
1) Legal Considerations for Garudas Potential Restructuring

2) What Would a Sovereign Debt Restructuring Look Like For Sri Lanka?

3) Liability Management Exercises by Chinese Real Estate Companies

4) Shanghai Reopening: View From Front Lines; Update on China Property Sector

5) Macau Gaming – An Overview of Upcoming Regulatory Changes

More information on our latest events and webinars.

Sign up to Reorg on the Record here, and request a trial.

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China’s Regulatory Stimulus, Impact on Real Estate Sector

Since the second week of November, the Chinese government has released a slew of new policies and initiatives aimed at expanding access to financing for privately held real estate developers. Policy highlights include the so-called Second Arrow program to provide up to RMB 250 billion total financing and 16 measures from the central bank and the China Banking and Insurance Regulatory Commission for supporting real estate companies. Asia’s high-yield market rallied following the unveiling of the policies, with China real estate bonds leading the rise.

Will the new policies end China’s real estate crisis? How much will they help lift the industry out of its recession? Could this be the turning point people were hoping for? And how long will the exuberance last? In this webinar, Reorg’s China editorial team will share their take on the situation.

Panelists:

  • Katherine Shi, Reorg China Editor
  • Anna Zhang, Reorg Senior Reporter
  • Shasha Dai, Reorg Managing Editor, China (Moderator)

Webinar details:

When: Tuesday, Dec. 13, 5 p.m. HKT / 9 a.m. GMT
Registration: To register for the webinar, click here.

The Asia Pacific Loan Market Association (APLMA) is a supporting organization for this webinar.

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Reorg Panel Event London – Navigating the Perfect Storm
Fri Nov 11, 2022 3:06 pm Distressed Debt  High Yield Bonds  Leveraged Finance

Reorg was delighted to bring leveraged finance and restructuring professionals together again in London at Claridge’s on November 3.

Mario Oliviero welcomed guests before an exciting leveraged finance panel.


Beatrice Mavroleon moderated an expert panel ‘Double-Digit Yields – Is Primary the New Distressed?’, including Tim Ayles from Rothschild & Co, Touboul Marc from Bain Capital, Robbie Harris from HSBC, and Jerome Ingenhoff from Alcentra.

Primary markets remain shut for all but tried and tested repeat issuers, and that is unlikely to change anytime soon, the panelists agreed. It will take time for the market to fully stabilize, and for banks to start underwriting debt again under new conditions, which means it will be at least the first or second quarter of 2023 before we start to see more deal flow. However, there was a constructive window in June and July, when a couple of CLOs priced, and there has been some stabilization over the last two weeks, with several more CLOs printing.

— Panelists, Double-Digit Yields – Is Primary the New Distressed

Reorg’s Magnus Scherman moderated our second live panel ‘The Distressed Landscape – Who Goes First and How?’
Our panelists for this session were Ralf Ackermann from Searchlight Capital Partners, Lois Deasey from Weil, Gotshal & Manges LLP and Gijs de Reuver from Houlihan Lokey for an engaging discussion. Reorg subscribers can read a full overview here.

We had an excellent attendance. Thank you to everybody who registered and joined us on the day.

For more information about upcoming events and webinars, click here.

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Podcast: High Yield Municipal Debt 2022 Review and Outlook for 2023
Fri Nov 4, 2022 3:50 pm Distressed Debt  High Yield Bonds

Reorg’s editorial staff (reporters, financial, and legal analysts) produce a podcast series from New York and London which recaps the week, previews of what’s to come, interviews with experts and deep dives on topical credit situations.

Americas Municipals by Reorg provides timely, objective and actionable intelligence covering higher yielding and liquid municipal issuers such as the Metropolitan Transportation Authority, Tower Health, and Puerto Rico Electric Power Authority [PREPA]. Our municipal debt coverage focuses on governmental news, source-driven reporting and legal and financial information and analysis that inform an issue’s credit support and issuers’ liquidity, ability to service debt and whether the credit has attained goals initially set out by management.

In this week’s episode of The Reorg Primary View, Citibank’s head of Municipal Strategy discusses the state of high yield municipals in 2022 and the outlook for the asset class in 2023 with Reorg municipals reporter Hoa Nguyen.

To listen to this podcast, click here.

If you are not a Reorg subscriber, request access here: go.reorg-research.com/Podcast-Trial.

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Reorg’s Recent EMEA Webinar Replays

Throughout the year, Reorg hosts webinars bringing together industry professionals to discuss themes in the performing, distressed, restructuring and post-reorg credit markets. View a selection from our EMEA Core Credit team here.

Houst RP Binds Dissenting HMRC – Where Next for SME Restructuring Plans?

Reorg’s Shan Qureshi hosted a webinar covering the first use of the Part 26A Restructuring Plan in the SME market by Houst Ltd. with the advisors on the deal.

The panel discussed “cross-class cramdown” with respect to the U.K. tax authority and explored the interaction between the allocation of a “restructuring surplus” and the “relevant alternative” order of priorities.

Our group of experts also discussed how the English court is becoming pragmatic when it comes to SMEs using the restructuring plan and where we may see more creative deals in the future.

View the recording here.


European Primary Update – What to Expect When the Market Reopens.

The European leveraged finance market enjoyed a blistering start to the year, notching up record issuance levels, fueled by healthy inflows and the market putting on reopening trades.

While market participants expect the torrent of new issues to resume post the August break, a number of potential headwinds loom, such as the tapering of central banks’ asset purchases amid rising inflation, major supply chain disruptions which are increasingly disrupting certain industries as well as the potential risk of winter lockdowns if Covid-19 rates spike again.

In this webinar, Reorg along with high-yield bond and loan investors, looked at the outlook for the European primary leveraged finance markets in the second half, discussing these potential risks, some of the key trends in primary markets and how they expect the rest of the year to shape up
View the recording here.


National Interest Insolvencies – Should these be for the State to Manage?

Over the last few years there have been four large national interest insolvency cases which have gone into compulsory liquidation with The Official Receiver and special managers appointed. In this webinar, our panelists – from Ashurst, EY and The Insolvency Service – discussed if compulsory liquidation is fit for purpose for these big complicated, national interest insolvencies. We also examined the factors pushing these cases into public sector insolvencies rather than private administration.

View the recording here.

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MSRB Municipal Bonds Report
Fri Oct 28, 2022 2:31 pm High Yield Bonds

Our Americas Municipals team publishes coverage of higher-yield and unrated municipal borrowers, as well as broader trends in the municipal bonds market and litigation that could impact the credit quality of state and local government obligors, enterprises and nonprofit corporations. Coverage focuses on source-driven reporting and regulatory disclosures, as well as analysis of legal documents and financial statements.

This week, in an Americas Municipals Industry Update the team looks at a study from the Municipal Securities Rulemaking Board (MSRB) on the impact of the COVID-19 crisis on competitive and negotiated offerings in the municipal bonds market.

“The total number of bids on competitive deals dropped significantly from March 2020 through May 2020, with winning spreads much wider when compared with competitive bids in the “Non-Covid Period in 2020,” according to a study released today by the Municipal Securities and Rulemaking Board, or MSRB.

This negatively affects pricing for borrowers that choose the competitive bid because the cost of capital is negatively correlated to the number of competitive bids. In other words, the more bids, the tighter the spreads, according to the report. In the secondary market, negotiated deals outperform competitive deals.

“In addition, when comparing the initial reoffering yield with the weighted-average secondary market traded yield in the first 30 days, the median trade spread was marginally negative for competitive offerings, but was substantially positive for negotiated offerings, suggesting that negotiated offerings tend to trade at a higher level in the secondary market,” according to the study.”

MSRB: Primary Offerings of Municipal Securities: Impact of COVID-19 Crisis on Competitive and Negotiated Offerings

Access more of our Americas Municipals coverage, request a trial here.

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