Americas Podcast: High Yield and Distressed Litigation Roundup

Rounding up and focusing our deep dive on the most prominent high yield and distressed litigation situations from the week of April 5, 2021, the Americas Core Credit team’s weekly podcast also takes a look at Hertz’s second amended plan of reorganization, Ferellgas’s lawsuit for their unpaid fees, and Intelsat’s Jackson crossover group and their debtors plans. The Hertz debtors, on April 3rd, filed a second amended plan of reorganization in a company disclosure statement reflecting an “enhanced proposal from Centerbridge Partners, Warburg Pincus, and Dundet Capital Partners” to fund the company’s chapter 11 cases with their $1.6B rates offering, a $565M direct purchase of Hertz reorganized equity by Dundet, Centerbridge and Warburg, and a $385M preferred stock issuance to Centerbridge and Warburg. In a development of the Ferrellgas bankruptcy cases after the company emerged, Moelis Company, which serves as financial advisor, capital markets advisor and investment bankers to Ferrellgas LP and parent Ferrellgas Partners LP, sued the company for more than $20M in unpaid fees in connection with the parent company’s recent chapter 11 filing and Ferrellgas LP’s out of court restructuring. On Intelsat, their ad hoc parent entity convertible noteholder group and the Jackson crossover group objected to the debtor’s proposed 9 month extension of their exclusive periods to file and solicit votes on a chapter 11 plan. Click through to listen to the full podcast on Spotify, iTunes or SoundCloud for our discussion on Hertz, Ferrellgas, Intelsat as well as our deep dive on the prominent high yield and distressed litigation situations from the week of April 5, 2021. If you are not a Reorg subscriber, request access here.
Fullerton Sale of Philippines, Singapore, China Assets Gets Muted Response

Fullerton Sale of Philippines, Singapore, China Assets Gets Muted Response

Reorg reported on muted interest from financial sponsors for the sale of Fullerton Healthcare Corporation Ltd. (FHCL) which may have stalled the sale process run by sellside adviser Bank of America Securities, according to two sources with knowledge. The sale process follows an earlier attempt to exit parts of the business through a special purpose acquisition company (SPAC), backed by FHCL’s original private equity sponsor, SIN Capital, according to the same sources. Click through for trial access: http://ow.ly/G3Fk50Ejst9
Reorg on the Record; The European primary market remains favorable

Reorg on the Record; The European primary market remains favorable

Written by Noor Sehur, Analyst Team Lead, EMEA Core Credit || The European primary market continues to remain favourable for new issuances. Reorg’s primary pipeline shows 36 companies with near-term maturities, 16 possible LBO deals and three deals from bolt-on acquisition financings which could take advantage of the attractive primary market. Recent deals with attractive pricing included Gatwick’s 4.375% 2026 bonds. The bonds were supported by the airport’s exposure to short haul flights, and equity cushion despite continued travel demand uncertainty. Advanz Pharma’s 2028 bonds also offered a premium to comparable bonds. Although most deals have priced tighter than original guidance in recent weeks, we have started to see pushback from investors on tighter margins. Douglas cut the €1.08 billion loan part of its debt package to €600 million while upsizing the SSNs to €1.305 billion from €1 billion and PIK notes to €475 million from €300 million, providing additional buffer to the secured debt investors. Pricing was also increased by 50 bps on the loan and the SSNs amid significant execution risks in the group’s transformation plan, near term cash burn and heavily adjusted EBITDA. In the loan market, margins widened on LGC Group's cov-lite term loan B, Idemia’s first lien term loan and Belron’s term loan B. || Sign up for our weekly updates here.

Pending NAV and Traton Merger Transaction Begins, CADE Market Surveys

Pending merger transactions between Navistar International Corp. (NAV) and Traton SE (TRATF) are beginning to be reviewed by Brazil’s Administrative Council for Economic Defense, or CADE. 35 companies named as market participants began receiving questionnaires on March 30 and with responses requested by April 14, CADE hopes to gain some further information on how the potential merger would impact the vehicle industries that each company plays a role in including light trucks, semi-heavy trucks, heavy trucks, road buses, city buses and more. Although NAV and TRATF filed paperwork in December 2020, CADE felt it was important to investigate the amended notification form provided by the companies. Each company owns operational subsidiaries in Brazil including MAN Latin America and Scania Latin America, as well as International Industria Automotiva da America do Sul Ltda. The review process through CADE can take 240 calendar days, and this period may be extended up to 90 days. Click through to read our detailed analysis of the merger situation between NAV and TRATF here: https://reorg.com/nav-tratf-merger/
Reorg Webinar Series: CFLD State of Play, Trading in Distressed Debt Through Creative Enforcement

Reorg Webinar Series: CFLD State of Play, Trading in Distressed Debt Through Creative Enforcement

Discussing China Fortune Land Development (CFLD) and their current state of play, Reorg’s managing editor for Asia, Shasha Dai, and Asia Core Credit senior credit analyst, James Shi, will be conducting a webinar on Wednesday, April 7, 2021 alongside Kobre Kim partner John Han. Our panel of experts will be taking a look at the state of trading in the distressed debt market through creative enforcement, plus the team will be diving deep into China Fortune Land Development’s event timeline from our initial coverage on the company in July 2019 when credit sensitive issues related to CFLD’s working capital were raised through to March 2021 when CFLD’s total overdue debt principal and interest reached RMB 37B. Our discussion will also include a review of the CFLD capital structure and their “two speed restructuring” process where the company plans to reach a debt restructuring agreement onshore first before CFLD addresses the offshore debt crisis.  Register for the webinar here: https://reorg.zoom.us/webinar/register/8016160136487/WN_IR7TI9PNTxyngNCfbVVkug  If you’re already a subscriber, you can view our ever-expanding coverage of the China Fortune Land Development situation here: https://app.reorg.com/v3#/dashboard/8185 If you’re not already a subscriber request a trial here: https://reorg.com/trial  

Yuzhou Management Cash Flow, Balance Sheet Report

After a conference call with investors on March 26, Yuzhou Management has assured its group of investors that their cash flow and balance sheets remain strong even though the company predicted a 94% year-over-year decline for their 2020 fiscal year. The company’s offshore notes fell deeply on the morning of the call creating obvious concern for investors, but management reassured investors by explaining that short sellers were dispersing false information. However, Youzhou can not comment further on the status of this information until their annual results are officially released on March 30.  The Covid-19 pandemic resulted in low selling prices and the delay of development and delivery of property projects in 2020 for Yuhou impacting their cash flow and profit, but the company expects dividend payments to remain on par with 2019. Click through to read our Asia Core Credit team’s analysis of the call including a detailed examination of the company’s corporate bonds and senior notes as well as Yuzhou’s capital structure: ADD LINK
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