Reorg Blog

Discussing June 2021 covenants trends, our Americas Covenants by Reorg team analyzed the operation of unsub spinoff baskets with regards to “No Carve-Out” and “Full Carve-Out” versions and how some formulations could present risks for creditors. This covenants trends piece also takes a deep dive into the fact that some unsub spinoff baskets may provide illusory protection to noteholders against the use of investment capacity for dividends through cash spinoffs.  Our experts discuss how the “Full Carve-Out” version from the unsub spinoff basket prevents all cash spinoff dividends protecting noteholders against a “cash spinoff” dividend in which the issuer uses...

Conducting a webinar discussing the Brazos restructuring situation, our Americas Core Credit experts will be taking a deep dive into the company’s financials on Wednesday, July 7, at 10 a.m. ET. Brazos is the only electric cooperative to file for bankruptcy after the Storm Uri disaster and related market dislocations, and the company did so in part to shield its member distribution cooperatives from immediate pass-through of Storm Uri charges.  During the webinar, our coverage team will provide an overview of the Brazos Electric chapter 11 case, sources of uncertainty and outstanding issues, including available legislative tools, claim reconciliation and...

On the Reorg Americas team, we’ve seen a pickup in chapter 11 filings in the past few weeks. Notable new filers include mall REIT Washington Prime and SoftBank-backed tech-oriented construction company Katerra. Another new filer - Krygyz gold miner Kumptor - is bringing fascinating questions of international comity and the reach of bankruptcy court powers to Judge Judge Lisa G. Beckerman in New York. Reorg continues its expansion into municipals coverage, and there we’ve seen some recent chapter 9 filings from Western Community Energy and the Texas Student Housing Authority. Meanwhile the endgame for Puerto Rico’s long-running Title III proceedings is coming into view, with battle lines being drawn...

Discussing the cruise shutdown litigation situation between the CDC and 3 states including Florida, Alaska and Texas, our Americas Core Credit experts dive deep into the Conditional Sailing Order, or CSO, where states are comparing the cruise shutdown to a ban on all ‘sexual intercourse’. Our Americas Core Credit team also discusses the mandatory limits for cruises being lifted on July 18th absent further ‘scientific evidence’. The CSO and related orders will become “non-binding,” according to direction from Judge Merryday, like CDC Covid-19 “guidance” aimed at other similar industries including the airline, railroad and hotel industries. The cruising halt caused...

Another exclusive from our Asia Core Credit team is about Chinese property developers resorting to lightly-regulated private bond issuance to circumvent China’s “three red lines” policy. For Greenland, which has strong ties with the Shanghai municipal government, to try to tap private investors and then pull the deal due to high cost, shows the market is tight with riskier borrowers. The team also covered last week Yuzhou Group’s attempted private deal. Click through to read more on this industry trend in the onshore real estate market: https://reorg.com/greenland-holdings-sounds-out-private-bond-deal/

On this week’s Americas Core Credit weekly podcast our expert team of covenants analysts, including Richard Barbour and Julian Bulaon, discuss Iconix Brands going private acquisition in detail.  Iconix Brands’ recently announced going private acquisition by Lancer Capital and the change of control implications under their debt docs is being structured as a two step merger. In broad strokes, the purchaser commences a tender offer to acquire all outstanding shares of Iconix’s common stock, and in this case that’s for $3.15 per share in cash. Assuming that the shares that are tendered in the offer and those held by the...