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.

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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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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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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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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Taking a look at the Kloeckner cash flow model, our EMEA Core Credit team provides a deep dive analysis on the company’s leverage under their base case mitigated by sufficient liquidity as well as their ability to manage raw material costs relative to previous periods of inflation. The Kloeckner cash flow model shows significant improvements based on their full-year EBITDA. The company’s unsecured notes remain fully covered under all scenarios and their confidence in managing raw material costs, as well as several actions taken since 2018, support our constructive view of the credit.


Click through to read our EMEA Core Credit team’s full analysis of the Kloeckner cash flow model as well as our analysis of the company’s valuation, their capital structure and other considerations: https://reorg.com/cash-flow-model-kloeckner-pentaplasts-high-leverage-under-base-case-mitigated-by-sufficient-liquidity-under-all-scenarios-no-near-term-triggers-ability-to-manage-raw-material-costs-underpins-cons/   

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EARNINGS: Saka Energi Q1’21 Revenue $46.7M, Down 39% YoY
Fri Jun 11, 2021 4:55 pm Financial Restructuring  High Yield Bonds

Our Asia Core Credit team has been closely covering Indonesian energy company Saka Energi. The company’s Q1’21 financial disclosures confirms our earlier scoop on the company’s intent to prepare a sinking fund for its $625 million 4.45% senior notes due 2024. The company has also guided operational improvements that are converging or in some instances, outperforming Reorg’s conservative valuation model that we published on May 25. Click through to read more or request a trial to Reorg’s Asia coverage: https://reorg.com/earnings-saka-energi-q121-revenue-46-7m-down-39-yoy/

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Part 26A Recognition Issues in Europe in 2021

The U.K. applied to join the Lugano Convention in April 2020, a time when the Brexit deadline was fast approaching. The convention governs the jurisdiction and the enforcement of judgments in civil and commercial matters between EU member states and Norway, Iceland and Switzerland. If Britain were allowed to join, a Part 26A restructuring would gain automatic recognition across EU member states. However the European Commission has stated that it is of the view that the U.K. should not be able to join the Lugano Convention, following Brexit.


The English court, in Gategroup’s Part 26A plan, held that the Part 26A plan falls within the remit of Article 1(1) of the EU’s Recast Insolvency Regulation (RIR), meaning it does not fall under the Recast Brussels Regulation (RBR) and, by extension, under the Lugano Convention or Hague Convention.


Prior to the Gategroup judgement, English restructuring lawyers argued that English law schemes of arrangement and Part 26A plans would be able to gain automatic recognition under either the Lugano Convention, the Hague Convention or the Rome I Regulation. Following the judgment, only the latter remains available. A company using the Part 26A plan will have to rely on Rome I, the UNCITRAL Model Law, bilateral treaties or any domestic comity regimes in each individual member state for recognition.


As the U.K. courts act as a restructuring hub for European companies, the effectiveness of the Part 26A plan throughout the EU has been compromised, and the new Dutch scheme may be well placed to attract restructurings away from London. The Dutch scheme is broadly similar in its features to the Part 26A plan; however, given that the Netherlands remains a member of the EU, the Dutch scheme falls under the remit of the RIR and will be given automatic recognition across the EU.


It is clear that the market sees a certain amount of parity between the two regimes. In a recent case, Jain International Trading BV’s (JITBV) proposed restructuring of its $200 million 7.125% senior notes due 2022 – which are guaranteed by Jain Irrigation Systems Ltd. – is structured as an exchange offer, with the proposed implementation of the transaction via either an English or Dutch scheme. The group eventually settled on the English tool, suggesting that London’s primacy as a restructuring hub is intact for now, but time will tell which forum ultimately wins out.


Read more from our EMEA team here

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Part 26A Restructuring Trends in the Courts

Virgin Atlantic became the first company to use the Part 26A restructuring tool, in September 2020, when its restructuring plan was sanctioned by the English High Court. The U.K. airline used the tool to implement a financial restructuring valued at £1.2 billion over 18 months. The group’s creditors were split into four classes: RCF plan creditors, operating lessor plan Creditors, connected party plan creditors and trade plan creditors, the latter of which had not committed to vote in favor of the plan at the time the restructuring was proposed. Eventually, the group won the support of all classes, but if the trade creditors had not voted in favor, the court would have the power to bind them to the plan.


U.K. restaurant group PizzaExpress also elected to use a Part 26A restructuring a month later to implement a plan that included a total debt reduction to £319 million from £735 million. The creditors were split into three classes: the senior secured noteholders, the senior unsecured noteholders and Pizza Express Financing 1 plc, the company’s sole shareholder. The group structured its creditor classes under its scheme of arrangement to ensure that the cross-class cramdown can be used if the senior unsecured noteholders did not support the plan. The plan was sanctioned by the U.K. High Court at the end of October, 2020 without the need to use the cross-class cramdown mechanism, as the plan was approved by all creditor classes. 


The Court of the Hague in the Netherlands heard its first case under the WHOA legislation on Jan. 15, 2021. The court ordered a cooling-off period and also the lifting of certain attachments which had been granted over the stock of an unnamed debtor. The hearing was a promising signal for proponents of the Dutch scheme, which is designed to rival the English scheme of arrangement as an efficient and precise restructuring tool.

Read more from our EMEA Core Credit team on the Part 26A restructuring trends as well as issues affecting the leveraged finance and distressed debt markets here

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Part 26A European Restructuring Regime

At the outbreak of the Covid-19 pandemic, European lawmakers raced to modify their restructuring regime in response to the crisis. On March 20, 2020, independent research group the Conference of European Restructuring and Insolvency Law (CERIL) called on all EU member states to suspend the duty of directors to file for insolvency proceedings based on over-indebtedness and inability to pay. It also urged governments to offer interim financing to struggling businesses, “hibernation” periods for small businesses and support for entrepreneurs and their staff.


In the months that followed, jurisdictions across the Continent mobilized practitioners, academics and legislators to introduce a host of innovative changes to their restructuring regimes, the impact of which are now beginning to be seen in the decisions being handed down by European courts. We have also seen early indications of the types of challenges that could face the cross-border recognition of English law decisions in a post-Brexit world.


Read our series of Part26A posts here:

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Update on the Avangrid Acquisition of PNM Resources
Wed Jun 2, 2021 7:19 pm Financial Restructuring  High Yield Bonds

Providing an update on the Avangrid acquisition of PNM Resources, our M&A by Reorg team analyzed the companies’ recent discussion with the New Mexico Public Regulation Commission where a decision was made to hold hearings in mid-August. A prehearing conference has also been scheduled. To read our full analysis and takeaways from the discussion between the New Mexico Public Regulation Commission on the Avangrid acquisition of PNM Resources click through here and request a trial: https://reorg.com/pnm-agr-merger/

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