New Look
GSO CLO Sells Out of New Look, Disposes of €41M FRNs to Distressed Fund; Bondholders Select Rothschild as FA After Appointing Sidley as Legal Advisor
Wed 01/24/2018 13:12 PM
GSO’s CLO has sold out of New Look, disposing of a €41 million block of the retailer's €415 million FRN to a distressed buyer, sources told Reorg. The fund was part of a group of the U.K. company’s largest holders - including Alcentra, Avenue, Carlyle, CQS, and M&G - that had formed an ad hoc committee and selected Sidley Austin and Rothschild as legal and financial advisors, several sources familiar with the situation told Reorg Research. The financial advisor was selected this week after a beauty parade last Thursday, Jan. 18.
The FRN was quoted at 44/46 today, up from 41 yesterday, Jan 23. New Look’s 6.5% bond rose to 45/47 today from 42 Tuesday. The 8% notes are quoted at 16/20 compared with 14 a few days ago.
Another set of creditors that bought New Look’s £700 million notes in the secondary market is in place, as reported. The secondary investors' group is working with Kirkland & Ellis. Carval is another of the company’s bondholders that bought in at a discount in the past months.
New Look has already started negotiating leases and the company’s owner Brait has been considering a landlord liability management exercise to cut the number of New Look stores by 10%, as reported. These measures may come alongside a broader balance sheet restructuring, possibly including debt-for-equity swaps. Brait hired Paul Hastings as its legal advisor. Houlihan Lokey and Goldman are financial advisors.
To implement a deal with landlords using a company voluntary arrangement, or CVA, the British fashion retailer needs 75% of landlords to agree to the downsize by value and 50% by number. Deloitte has been working on the CVA option, which may reduce 10% of total stores, the sources said.
New Look’s capital structure is below, while Reorg’s proprietary analysis is HERE:
The FRN was quoted at 44/46 today, up from 41 yesterday, Jan 23. New Look’s 6.5% bond rose to 45/47 today from 42 Tuesday. The 8% notes are quoted at 16/20 compared with 14 a few days ago.
Another set of creditors that bought New Look’s £700 million notes in the secondary market is in place, as reported. The secondary investors' group is working with Kirkland & Ellis. Carval is another of the company’s bondholders that bought in at a discount in the past months.
New Look has already started negotiating leases and the company’s owner Brait has been considering a landlord liability management exercise to cut the number of New Look stores by 10%, as reported. These measures may come alongside a broader balance sheet restructuring, possibly including debt-for-equity swaps. Brait hired Paul Hastings as its legal advisor. Houlihan Lokey and Goldman are financial advisors.
To implement a deal with landlords using a company voluntary arrangement, or CVA, the British fashion retailer needs 75% of landlords to agree to the downsize by value and 50% by number. Deloitte has been working on the CVA option, which may reduce 10% of total stores, the sources said.
New Look’s capital structure is below, while Reorg’s proprietary analysis is HERE:
This article is an example of the content you may receive if you subscribe to a product of Reorg Research, Inc. or one of its affiliates (collectively, “Reorg”). The information contained herein should not be construed as legal, investment, accounting or other professional services advice on any subject. Reorg, its affiliates, officers, directors, partners and employees expressly disclaim all liability in respect to actions taken or not taken based on any or all the contents of this publication. Copyright © 2024 Reorg Research, Inc. All rights reserved.