High Yield Bonds

Intel and data on high-yield bonds for distressed debt investors, lawyers and other restructuring professionals to incorporate into their daily workflows and research.

KME Group Base Borrowing Facility Extension
Tue Apr 20, 2021 9:02 am Distressed Debt  High Yield Bonds

Reorg’s EMEA Core Credit team has published 19 updates so far this year on KME Group, one of the world’s largest copper producers. In its second-quarter call in October 2020, KME’s management guided that the extension to its borrowing base facility would be concluded in November 2020. By mid-December 2020, the company said it had received extension commitments from 51% of its lenders. At the start of January this year, Reorg reported that the company had obtained the approval of over 70% of its lenders.

The delay in the extension of the facility was due to some lenders’ concern about the sharp rise in copper price, which translates into increased funding requirements for the company, sources said. The implications of rising copper prices on the group’s funding is something that Reorg previously highlighted, especially in the context of reduced working capital funding following the termination of the MKM borrowing base facility.

Share this post:
Mon Apr 12, 2021 4:30 pm Distressed Debt  High Yield Bonds  Leveraged Finance

Rounding up and focusing our deep dive on the most prominent high yield and distressed litigation situations from the week of April 5, 2021, the Americas Core Credit team’s weekly podcast also takes a look at Hertz’s second amended plan of reorganization, Ferellgas’s lawsuit for their unpaid fees, and Intelsat’s Jackson crossover group and their debtors plans.

The Hertz debtors, on April 3rd, filed a second amended plan of reorganization in a company disclosure statement reflecting an “enhanced proposal from Centerbridge Partners, Warburg Pincus, and Dundet Capital Partners” to fund the company’s chapter 11 cases with their $1.6B rates offering, a $565M direct purchase of Hertz reorganized equity by Dundet, Centerbridge and Warburg, and a $385M preferred stock issuance to Centerbridge and Warburg. In a development of the Ferrellgas bankruptcy cases after the company emerged, Moelis Company, which serves as financial advisor, capital markets advisor and investment bankers to Ferrellgas LP and parent Ferrellgas Partners LP, sued the company for more than $20M in unpaid fees in connection with the parent company’s recent chapter 11 filing and Ferrellgas LP’s out of court restructuring. On Intelsat, their ad hoc parent entity convertible noteholder group and the Jackson crossover group objected to the debtor’s proposed 9 month extension of their exclusive periods to file and solicit votes on a chapter 11 plan. Click through to listen to the full podcast on Spotify, iTunes or SoundCloud for our discussion on Hertz, Ferrellgas, Intelsat as well as our deep dive on the prominent high yield and distressed litigation situations from the week of April 5, 2021.

If you are not a Reorg subscriber, request access here.

Share this post:
Reorg on the Record; The European primary market remains favorable

Written by Noor Sehur, Analyst Team Lead, EMEA Core Credit || The European primary market continues to remain favourable for new issuances. Reorg’s primary pipeline shows 36 companies with near-term maturities, 16 possible LBO deals and three deals from bolt-on acquisition financings which could take advantage of the attractive primary market. Recent deals with attractive pricing included Gatwick’s 4.375% 2026 bonds. The bonds were supported by the airport’s exposure to short haul flights, and equity cushion despite continued travel demand uncertainty. Advanz Pharma’s 2028 bonds also offered a premium to comparable bonds. Although most deals have priced tighter than original guidance in recent weeks, we have started to see pushback from investors on tighter margins. Douglas cut the €1.08 billion loan part of its debt package to €600 million while upsizing the SSNs to €1.305 billion from €1 billion and PIK notes to €475 million from €300 million, providing additional buffer to the secured debt investors. Pricing was also increased by 50 bps on the loan and the SSNs amid significant execution risks in the group’s transformation plan, near term cash burn and heavily adjusted EBITDA. In the loan market, margins widened on LGC Group‘s cov-lite term loan B, Idemia’s first lien term loan and Belron’s term loan B. || Sign up for our weekly updates here.

Share this post:
Reorg Webinar Series: CFLD State of Play, Trading in Distressed Debt Through Creative Enforcement

Discussing China Fortune Land Development (CFLD) and their current state of play, Reorg’s managing editor for Asia, Shasha Dai, and Asia Core Credit senior credit analyst, James Shi, will be conducting a webinar on Wednesday, April 7, 2021 alongside Kobre Kim partner John Han. Our panel of experts will be taking a look at the state of trading in the distressed debt market through creative enforcement, plus the team will be diving deep into China Fortune Land Development’s event timeline from our initial coverage on the company in July 2019 when credit sensitive issues related to CFLD’s working capital were raised through to March 2021 when CFLD’s total overdue debt principal and interest reached RMB 37B. Our discussion will also include a review of the CFLD capital structure and their “two speed restructuring” process where the company plans to reach a debt restructuring agreement onshore first before CFLD addresses the offshore debt crisis. 

Register for the webinar here: https://reorg.zoom.us/webinar/register/8016160136487/WN_IR7TI9PNTxyngNCfbVVkug 

If you’re already a subscriber, you can view our ever-expanding coverage of the China Fortune Land Development situation here: https://app.reorg.com/v3#/dashboard/8185

If you’re not already a subscriber request a trial here: https://reorg.com/trial  

Share this post:

Featuring a discussion on a force majeure dispute following the Texas winter storm, CBL Property’s amended RSA, Seadrill Partners’ disclosure statement approval and a deep dive into Argentine oil company YPF’s state of play after their liability management exercise, our Americas Core Credit weekly podcast breaks down the most important stories from the week of March 22nd, 2021. 

In terms of the force majeure dispute following Texas winter storm Uri, our team discussed the applicability of these clauses in power hedging agreements and how they could dictate legal strategies taken by Texas electricity generation projects facing high bills from financial institution hedge counterparties. Our team takes a look specifically at Canadian Breaks, a large wind farm in the Texas panhandle, after they filed a petition against J.P. Morgan when the bank presented the wind farm with a $79M bill for power purchased during the storm. 

On CBL Properties, our experts discuss the debtors filing of an amended restructuring support agreement which resolved their disputes with prepetition lenders and agent Wells Fargo paving the way for a potentially consensual restructuring of the mall REIT’s funded debt. Discussing Seadrill Partners, our team broke down the disclosure statement as well as Judge David Jones’ approval of this statement on a conditional basis after counsel announced significant progress on a global settlement with Seadrill Limited.  

Finally, Kyle Owusu, Director of Emerging Markets Credit, took a deep dive into Argentine oil company YPF and their current state of play after their liability management exercise. The company’s new 2029 and 2033 bonds, which were issued as part of the company’s February liability management exercise, are being offered at around 58, 50, and 48 respectively according to advisers. Click through to listen to the full episode on Spotify, Soundcloud or Apple Podcasts.

Share this post:
Chinese high-yield issuers at odds with credit rating agencies
Thu Mar 25, 2021 2:23 pm Distressed Debt  High Yield Bonds

Written by Shasha Dai, Managing Editor, China ||

You are ready to put your house on the market but don’t see eye to eye with the appraiser on the value of your property – or worse yet, you couldn’t afford an appraisal report.

This is the same situation many Chinese high-yield issuers find themselves these days. At a time when they need to tap the bond market for fresh capital to refinance existing debt, they are at odds with credit rating agencies over their rating methodology or have had their ratings withdrawn for unspecified commercial reasons.

Yunnan Provincial Investment Group, or YPIG, said it has been working with Moody’s as its new rating provider since Fitch downgraded and subsequently withdrew ratings of YPIG citing “commercial reasons.” Chongqing Energy Investment Group also saw its ratings withdrawn by Fitch, after it ceased participating in the rating process, according to Fitch.

Risesun Properties Group said it requested S&P withdraw its rating because it did not reflective of the company’s fundamentals. The withdrawal also helps lower its operating cost, said Risesun. || Sign up for our weekly updates here.

Share this post:
Lycra’s Bondholder Group Looking for More Transparency in Ruyi-Huayang Joint Venture
Tue Mar 23, 2021 5:12 pm High Yield Bonds  Leveraged Finance

After a joint venture between Shandong Ruyi Technology Group and Huayang New Material Technology Group, a group of Lycra bondholders are looking for more clarity due to the suspected use of Lycra’s intellectual property and potential technology transfer for a construction project between Ruyi and Huayang. Lycra suspects that their branding and technology is going to be leveraged for the project without authorization. These complications came after Huayang and Ruyi signed a framework agreement to institute fiber material manufacturing facilities including one for Lycra that could produce 60,000 tonnes of spandex per year by December 2021. 

Additionally, as part of the deal between Ruyi and Huayang, Lycra was aimed to be listed on China’s STAR board if Huayang provided RMB 2.5 billion to Ruyi in exchange for an equity interest in the U.S. spandex company as well as RMB 3 billion worth of intellectual property rights and RMB 7 billion worth of offtake contracts. The bondholder group at Lycra were alerted that Ruyi had received part of the RMB 2.5 billion proceeds giving them reason to believe that intellectual properties had been sold by its Chinese parent. Ruyi also recently told some Lycra bondholders that they are looking to float Lycra on the Hong Kong stock exchange instead of the Shanghai tech board, but bondholders are skeptical that this will ever happen. Read our full analysis of the Lycra bondholder group situation here: https://reorg.com/lycras-ad-hoc-bondholder-group-seeks-clarity-on-ruyi-huayang-joint-venture/

Share this post:
Languang Sichuan Development Distressed Debt Updates
Thu Mar 18, 2021 5:38 pm Distressed Debt  High Yield Bonds

Our unique editorial team, “the Reorg trifecta”, combines financial and legal analysis with reporting to provide a unique and holistic view of the most important business development across the world. Since the start of 2021, our Asia Core Credit team has published more than 30 updates on Languang Sichuan Development, most recently focusing on the refuted but persistent rumor that the company is contemplating exiting its Shanghai headquarters and relocating back to its native Chengdu. The company reiterated that Shanghai and Chengdu constitute its dual headquarters, and that Shanghai has played an important role in accessing capital, investment and talent.  Click through to read more from our Asia Core Credit team: https://reorg.com/sichuan-languang-development/ 

Share this post:

Released on a bi-weekly basis, the EMEA Core Credit Podcast by Reorg discusses the most prominent issues, situations and companies in the high-yield and distressed debt space. Our team of reporters, financial analysts and legal analysts provide comprehensive, real-time and up-to-date news, commentary and analysis on each issue discussing how these situations may impact their surrounding markets. Each episode of the podcast also features a deep-dive into a particularly interesting situation from the previous week. This week’s deep dive discusses U.K. working capital finance provider Greensill and German value fashion retailer Takko.

Greensill Capital made headlines earlier in the month when Credit Suisse froze about $10B in funds that were mostly linked to Greensill’s sourced securities. After these announcements there was a global avalanche of coverage following Greensill and last Monday, March 8, directors of Greensill Capital U.K. Limited and Greensill Capital Management Company U.K. Limited applied to the English High Court for the appointment of administrators. In the second half of this podcast, our coverage team reviewed German fashion retailer Takko after their bonds dropped to the low to mid 80s following the retailer’s announcement that talks for a €60M stake guarantee loan had failed. Click through to listen to the full episode on Apple Podcasts, Spotify or Soundcloud to hear EMEA Core Credit senior legal analyst Shan Quereshi and EMEA Core Credit senior reporter Aurelia Seidlhofer discuss each situation.

Share this post:
Sichuan Languang Development Says Sale of Chengdu Dikang Pharmaceutical Is Strategic Decision
Tue Mar 9, 2021 7:20 pm High Yield Bonds

With the Asia Core Credit team publishing more than 20 updates on Sichuan Languang so far this year, it has certainly been “one to watch.” In response to the disposal of drug maker Chengdu Dikang Pharmaceutical in July 2020, Languang denied that the sale was due to its liquidity needs. Languang has been trying to introduce shareholders and sell Dikang when appropriate since 2019. It pointed out that the timing of the announcement of the sale was a function of the natural progression of the negotiations.

Please click through to read an update from Thu 03/04/2021, and request a trial to read our full coverage of Sichuan Languang.

Share this post:
Thank you for signing up
for Reorg on the Record!