Lessons From Incora May Guide Term Loan Co-Op Group in Cision

In addition to the 2028 unsecured notes, Cision’s capital structure includes a €500 million euro term loan B due 2027 and a $1.2 billion term loan B due 2027, which funded the acquisition by Platinum.

In March, Reorg reported that the company’s creditors had begun mobilizing to proactively analyze liability management scenarios in case earnings and liquidity continue to deteriorate.

More recently, a group of lenders holding a majority of the term loans finalized a cooperation agreement, according to sources, amid the possibility of a liability management transaction similar to the non-pro rata uptier exchange by another Platinum Equity portfolio company Incora (Wesco Aircraft). Platinum has bought Cision unsecured bonds as well, the sources said.

In Incora, in anticipation of a potential coercive transaction, a group of noteholders amassed roughly 40% of the then outstanding principal under the company’s 9% secured notes due 2026. At the time, this blocking position would have been sufficient to veto a collateral uptiering of the notes because amendments to Incora’s indenture that subordinated noteholders’ liens required the consent of at least 66.67% of the notes balance.

Nevertheless, Platinum and Incora were able to circumvent the dissenting holders’ blocking position by amending the 2026 secured notes indenture to create additional debt capacity (which was permitted with the consent of a simple majority of holders) and then using that additional capacity to issue new 2026 secured notes to favored noteholders, thereby diluting the dissenting noteholders’ blocking position below the requisite 33.33%.

To access our ongoing litigation coverage of the Incora situation, click HERE.

Recent trading activity in Cision’s 2028 notes suggests that Platinum may again be on the move. As of close of trading yesterday, Wednesday, May 17, the unsecured notes were quoted at 55.8/57.8, up from 44.5/45.3 a month earlier, according to Solve Advisors. The spike in the notes’ trading price is believed to have been caused in part by a series of block purchases by Platinum in recent weeks, according to sources.
 
The euro term loans and USD term loans were last quoted at around 67 and 70.5, respectively, according to Solve Advisors.

Americas Covenants reviewed the terms of Cision’s 2028 notes when they came to market in January 2020. We have also concluded an analysis of Cision’s term loan B facilities, as amended through June 2021. To see the analysis or to talk to one of our legal analysts, click HERE; you can get access to the term loan analysis if you have a copy of the underlying credit agreement.