Reorg Blog

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...

Primary Muni Deals Going Day-to-Day Reflect Second Week of Muni Outflows, Cautious Investor Sentiment The last week of January 2022 had $1.15 billion scheduled to price with the largest deals coming from high-yield bond issuers. But market technicals and macros headwinds beached a few of them, said market sources.  The largest of the week’s primary offerings was $419 million from the New Hope Cultural Education Facilities Finance Corp. on behalf of the Dwyer Workforce Development Portfolio Project, which initially launched in December 2021. A $113 million offering from the California Statewide Communities Development Authority, or CSCDA, for an essential housing...

Written by Julie Miecamp, Managing Editor, Europe || For junk-rated debt investors the new year has started with a flurry of high-yield bonds and leveraged loan deals from repeat issuers. As market conditions in Europe remain benign due to government and central bank support, investors have been buying into well-known single B credits. Distressed debt investors have a dearth of new opportunities to consider, although some have been busy with existing negotiations. Creditors rejected a draft plan submitted by Spanish real estate servicing company Haya Real Estate before Christmas. The deal aimed at tackling the company’s 2022 maturities. Debtholders worried that...

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...

Morristown, N.J.-based Alliant Technologies, which does business as TenFour, a provider of turnkey, subscription-based networking, communications and security services for businesses, filed for chapter 11 protection. The bankruptcy filing is planned to effectuate a sale of substantially all of its assets, with Acuative Corporation as stalking horse. Mark Cantaluppi, the CEO of debtor Technology Keiretsu LLC, which serves as parent of the other debtors, says the debtors “now stand on the threshold” of consummating a going concern sale “designed to maximize recoveries for creditors, continue uninterrupted service to the Debtor’s’ customers, and preserve employment for TenFour’s workforce.” Get the full bankruptcy...

For years, sponsors have tried (most often, successfully) to chip away at lender protections in credit agreements. With so much money flowing into the leveraged loan market, the skyrocketing demand has created an increasingly borrower-friendly environment and resulted in many credit agreements looking more like IOUs than highly negotiated contracts that seek to balance the interests of borrowers and lenders. In the article linked below (available to LSTA subscribers), we discuss certain new terms and mechanics being seen in sponsored, private credit agreements reviewed by Reorg Covenants Prime and briefly review other terms that may at one time have been...