Reorg on the Record: Borrowers flock to capital markets to secure funding…
Written by Adelene Lee, Managing Editor, Americas Core Credit, Middle Market & Municipals || As the Fed signaled that it is planning to increase interest rates at its March meeting, borrowers flocked to the capital markets in January to secure funding at rates that remain historically low. Given the direction interest rates are taking, investors are showing a preference for floating-rate instruments including leveraged loans, which saw numerous multi-billion dollar deals to support leveraged buyouts, while turning relatively more cautious on fixed-coupon, longer-duration high yield bonds. Reorg’s Americas team has begun to expand its focus to delve into selective sub-investment grade issuers with high leverage, including Scientific Games, Athenahealth, McAfee.
While Apex Tool Group found redemption in the syndicated loan market after failing to merge with Wanxiang Group Corp. late last year, other companies that either took on expensive debt or sought long-term waivers to escape fixing their balance sheets may face the inevitable in a higher interest rate environment if they fail to return to profitability, as participants in our outlook story for 2022 concluded.
A preview of our in-depth coverage of these names, and many more, is available below.
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Our Americas teams are working tirelessly to bring subscribers the most in-depth data, analysis and reporting on more than 1,000 performing and distressed credits. Below is a glimpse into our offering:
Purdue Pharma
The U.S. Court of Appeals for the Second Circuit has accepted the appeal of U.S. District Judge Colleen McMahon’s Dec. 16, 2021, decision, which vacated Purdue Pharma’s confirmation order and invalidated third-party releases of the Sackler family. In an order last Thursday, Jan. 27, the circuit court granted the petitions for permission to appeal filed by the debtors and other supporters of Purdue’s chapter 11 plan. » Continue Reading
Municipal Debt Industry Update
With the municipal market undergoing its second straight week of outflows, breaking a 45-week positive flow streak, cash pulled to the sidelines by spooked investors slowed the high-yield pipeline. The outflows are not expected to be a permanent pattern at this time and largely reflect inflation and rate hike concerns of investors, according to market participants. » Continue Reading
Ascena Retail
At a status conference in the Ascena Retail debtors’ cases, Judge Frank Santoro and the parties discussed the debtors’ motion (previewed at last week’s conference and filed Wednesday evening, Jan. 26) seeking an order modifying and reconfirming the debtors’ plan of liquidation. The proposed modifications would strike the third-party releases severed by the Virginia district court earlier this month and revise the exculpation provision in accordance with the district court’s opinion. » Continue Reading
Puerto Rico
After certifying an updated fiscal plan for the commonwealth during its 32nd public meeting today, most PROMESA oversight board members and Executive Director Natalie Jaresko said additional fiscal management actions are needed at the central government level before the oversight board can end its mandate while ensuring the Puerto Rico government does not backslide into a second bankruptcy. » Continue Reading
Athenahealth
The company, which provides network-enabled services for healthcare and point-of-care mobile apps, is issuing $2.5 billion of unsecured notes due 2030 in connection with the company’s acquisition by Bain Capital and Hellman & Friedman. Proceeds of the Notes, together with $5.75 billion of new term loan borrowings, $2.36 billion of preferred equity proceeds and a $6.16 billion sponsor investment, will be used to pay the purchase price for the Acquisition and to repay about $4.56 billion under an existing credit facility. » Continue Reading
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