Reorg on the Record: Purdue, PBF Energy, Synaptics, and more topical credits… (01/12/22)

Written by Julian Bulaon, Legal Analyst, Americas Covenants || To kick off the new year, Reorg’s Americas team has prepared in-depth analyses on a number of highly topical names, including PBF Energy, SmileDirectClub and Synaptics Inc. Specifically, we discuss how regulatory considerations and drafting nuances in debt documents may expand each company’s ability to address current and future liabilities.

In PBF, we quantified the impact on the company’s financials from recent proposed renewable fuel volume targets issued by the Environmental Protection Agency. We also looked at SmileDirectClub’s cash burn and concluded that the company could seek to address its shortening liquidity runway by raising operating-company-level debt that would be structurally senior to its existing convertible notes. Our Americas Covenants team also discussed the unusually expansive structurally senior debt capacity available under Synaptics’ debt documents.

A preview of our in-depth coverage of these names, and many more, is available below.

Julian Bulaon

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:

The company, which has historically burned substantial amounts of free cash flow, could seek to raise structurally senior operating-company-level debt to extend the company’s liquidity runway. With a liquidity balance of $307.6 million as of Sept. 30, 2021 (consisting entirely of cash on the balance sheet), the company’s current run rate of LTM free cash flow burn would imply less than two years of liquidity runway. » Continue Reading

The Chicago Board of Education
The Chicago Board of Education, or CBOE, released through MuniOS a preliminary offering statement and road show presentation related to its planned $862.65 million issuance of unlimited tax general obligation, or ULTGO, bonds that show the transaction is expected to price on Jan. 13 and close by Feb. 1. Columbia Capital Management is advising the CBOE on the transaction. » Continue Reading

On Nov. 24, 2021, Synaptics – a California-based developer of human interface hardware and software, including touchpads for computer laptops – agreed to sell certain properties in San Jose, Calif., to S B C & D Co. Inc. (dba South Bay Development Co.) in a sale-leaseback transaction for a purchase price of $58 million. The company said it expects the transaction to close in the third quarter of fiscal 2022 (ending March 2022). » Continue Reading

Bankruptcy Industry Update: Outlook 2022
Restructuring professionals highlighted a number of bankruptcy issues and trends to watch out for, including non-pro-rata debt transactions, which are expected to continue until courts define the limit, releases of claims against non-debtor third parties in chapter 11, payment of interest on unsecured claims against solvent debtors, and bankruptcy venue. » Continue Reading

ION Geophysical
The provider of seismic data services and libraries to the offshore oil and gas industry, ION Geophysical, has solicited proposals for a debtor-in-possession facility from investors, indicating it is considering filing chapter 11 bankruptcy, according to sources. The company skipped $12.3 million of principal and interest payments due on Dec. 15 on two tranches of its second lien notes and entered a 30-day grace period. » Continue Reading

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