Back in the day, this is how many exchanges were launched, such as a series for what was then called iHeartCommunications (now iHeartMedia). The company launched several between 2011 and 2015, then a series of five consent solicitations in 2016 which were met with resistance by bondholders and amended before being completed. Ultimately, it was not enough as the company filed for bankruptcy in 2018.

In the still kicking category, AMC Entertainment launched an exchange in 2020 that it ultimately completed after modifications.

Yet the early such “naked exchanges” — shorthand in the industry — happened before the surge in co-op groups. Indeed, iHeart’s next attempt at an exchange in 2017 was fought with one of the templates for the modern-day co-op group, essentially where a blocking position of bondholders contractually agree not to do anything adverse to one another.

Now, such exchange attempts are met with fierce and sometimes quick resistance. Carvana launched its debt exchange last year to extend the company’s maturities and reduce short-term cash interest expenses, and bondholders put together what was at the time the biggest co-op group ever and renegotiated. It still worked out, as the company stayed out of bankruptcy, and then this week announced it would start paying cash interest on its PIK-toggle notes in 2025. (Our credit analysts unpacked the financial implications of that earlier this week.)

DISH bondholders too prevented a naked exchange from happening on terms they didn’t like by banding together into what again became the largest co-op group on record, before Altice France bondholders broke its record last month (though they were pre-emptive before an exchange launched).

Cumulus Media recently launched an exchange without any warning to its creditors, who then also banded together in a co-op and got 14 points more than they were offered initially. Bondholders were touting this as a great example of what happens when they work together.

As a result, naked launches look different for public companies now than they once did. And more often, companies are looking to negotiate side deals first with a group of creditors or third parties.

AMC for example continues to ride the meme-stock phenomenon and has pursued clever deals to address its debt stack following its major 2020 exchange. Various bondholder groups formed but never got traction, and one-off deals like the one disclosed this week with an unnamed second-lien holder have been the company’s preference.

What has not happened nearly as often — if ever — are these types of exchanges for private companies. This is why the deal 9fin reported this week for student trip company WorldStrides, where the company offered lenders the option to exchange at a discount into priority paper without getting any ad hoc group or third-party agreement beforehand, is interesting.

We’ll see if private naked launches catch on.

People Moves

If you have any recent moves to announce, please send to one of our team’s emails below to include in our People Moves section.

Chelsea Darnell has joined Paul Weiss as a partner in the mergers and acquisitions practice in New York, leaving Kirkland & Ellis. Emily Katz-Turner, previously an executive director at Morgan Stanley in distressed credit, has started a position as managing director at Ducera Partners. Brendan Hall joined Jain Global as a distressed analyst from Brean Asset Management. Kristina Kuhnke joined Monarch Alternative Capital as a managing director in the firm's London office from RoundShield Partners, while Roddy Conner joined Monarch as a director focused primarily on Monarch's existing and developing real estate platform and partnerships joining from ACORE Capital.

This week’s news

Altice France — The telecom company has revealed its first highly anticipated move, disclosing designations of five more subsidiaries as unrestricted as well as moving its HoldCo RCF down to OpCo level. 9fin’s deep-dive report published earlier explores the range of eventualities that are blown open by creditors’ diverging incentives, Patrick Drahi’s huge capacity to strip value away from creditors, French law considerations and the intricacies of timings, triggers and creditor group make-ups.

iHeartMedia — A group of first lien lenders to iHeartMedia are organizing loosely with Gibson Dunn, but haven’t yet formally retained the law firm, according to 9fin sources. (For a look at the company’s options for a potential liability management exercise under its credit documents, go here.) The move is the latest sign of investor concerns over the challenges facing the media industry.

Peloton — The fitness company is working with JP Morgan to gauge investor interest in refinancing its existing debt with a new loan that would incorporate some bond-like call structures.

Salem Media — Certain debtholders have banded together with Paul Hastings to negotiate a possible debt restructuring with the conservative Christian media company.

2U — The education tech company has started confidential negotiations with creditors on ways to overhaul its debt. Once a high-flying online education startup, 2U is facing an upcoming debt wall and heightened regulatory scrutiny of its revenue-sharing business model. 

Robertshaw — The judge overseeing the Robertshaw bankruptcy and the legal fight over the company’s 2023 liability management exercise denied motions brought by parties on both sides of the dispute in a recent hearing. Also, in a small win for the debtors, the judge decided not to bifurcate the liability and remedy issues in the adversary proceeding which could have resulted in a delay to the sale process.

Incora — The judge overseeing Incora’s adversary trial handed the bankrupt aerospace supplier’s sponsor Platinum Equity a win and a loss this week. While Judge Marvin Isgur issued an opinion allowing witness testimony that Platinum wanted excluded, he vacated an earlier decision that recalled one of the private equity firm’s fact witnesses to the stand.

ConvergeOne — The debtors head to their confirmation hearing with the requisite votes achieved and only one objection to overcome, which you can read more about here.

Diamond Sports Group — During a 15 May status conference before Judge Christopher Lopez, Diamond’s three major league team partners, the MLB, NBA, and NHL, spoke up regarding the lack of a renewal agreement with Comcast, Diamond’s third largest distribution partner.

EchoStar/DISH — The DISH DBS noteholder lawsuit has been moved to federal court. Earlier, EchoStar posted dismal Q1 24 results — the company continued to bleed subscribers and hemorrhaged $1.2bn cash in Q1 24, while still not having stated plans to manage its debt obligations, the most conspicuous of which is $1.98bn in outstanding senior notes due in November. Management commented that they will look to fight off the DISH DBS noteholder lawsuit in court.

Thrasio — The Amazon aggregator’s Chapter 11 plan confirmation hearing was delayed to 10 June, amid continuing investigations by the disinterested directors and the UCC into potential unencumbered assets and estate claims and releases.

Medical Properties Trust — Medical Properties Trust delayed the filing of its 10-Q for Q1 24 to 15 May, after which it announced that the filing would be further delayed due to the need for the company and its auditor, PwC, to spend additional time reviewing the measurement and timing of various impairments tied to the Chapter 11 filing of Steward Health.

CURO Group — The consumer finance company received confirmation of its Chapter 11 plan — a pre-pack led by Oaktree, Caspian Capital, and Empyrean which equitizes most of its secured debt.

McAfee — The company launched a term loan B repricing deal this week, with lenders to also receive a $250m paydown. Earlier, a group of lenders that 9fin had reported had organized were said to have signed a cooperation agreement and also hired an FA.

Other active distressed and restructuring coverage

Alkegen — Formerly known as Unifrax, the specialty materials maker is getting financing proposals from third party investors to help pad its liquidity and address its upcoming debt wall.

Anthology — Nearly 100% of the first lien loans of the Veritas-backed ed-tech company are said to have agreed to exchange under a liability management deal that 9fin had reported was launched after negotiations with an ad hoc group of first lien lenders. The deal also extends the company’s revolver to early-2028.

Altice USA — As part of the heavily indebted Drahi empire that has come into focus after the hardball tactics taken with Altice France creditors, the USA business of Altice has now reportedly started working with a financial advisor while bondholders are organizing.

Ardagh Group — Holders of unsecured bonds and ARD Finance PIK notes have migrated to work with Akin Gump and hired an FA.

Astound Broadband — A group of lenders started confidential talks with the Stonepeak-backed internet and cable provider. While the company has far-dated debt maturities, it is grappling with a cash flow squeeze.

Bausch Health — Bausch Health’s Q1 numbers and transcript are up on 9fin, as the company reported that it has kept chipping away at 2025-2027 maturities through open market repurchases, which will continue, while the B+L spinoff is a key priority in 2024. The suit BHC filed against Amneal triggered a 30-month stay of potential FDA approval for Amneal.

Belk — Lenders to the department store chain have been speaking with the company about a restructuring that could exchange much of its debt into equity.

Cano Health — The de-SPAC’d healthcare services provider is in bankruptcy with a restructuring support agreement from holders of around 86% of its secured debt and 92% of the senior notes.

Carestream Dental — The CD&R and CareCapital Advisors-backed company has been working with to address its revolver and term loan maturities this year.

Charge Enterprises — The Chapter 11 reorganization for the electric vehicle charging company took effect, with Arena Investors taking majority equity.

CommScope — The company reported Q1 24 results, with continuing declines across segments and significant cash burn, though the CCS and OWN segments have shown signs of recovery. Management noted that CommScope was continuing to evaluate all alternatives, including using flexibilities in credit documents (9fin analyses here), to address debt maturities. 9fin had earlier reported that a group of largely unsecured lenders pitched new money second lien financing to repay near-term maturities.

Cox Media Group — Certain holders of Cox Media Group’s term loan and bonds organized driven by concerns around the Apollo-backed TV broadcasting and radio company issuing dividends when the business is struggling and facing a high debt burden.

Del Monte Foods — The packaged food manufacturer and distributor is looking to raise a $300m first-in, last-out loan to bolster liquidity in light of high costs and declining sales.

Dynata — The Court Square and HGGC-backed company is advancing negotiations with its creditors over a restructuring plan, which could see it hand control to a group of first lien lenders.

Emergent BioSolutions — Holders of Emergent’s 3.875% SUNs due 2028 stand to receive a high potential recovery amid a stabilization of earnings, per 9fin analysis, as our illustrative waterfall outlines a scenario-based recovery of between 92% and 93% with the bonds quoted near 60 cents.

Enviva — Vinson & Elkins fought the US Trustee’s objection to its proposed retention as debtors’ counsel. V&E’s lawyer and the US Trustee sparred over what acceptable disclosure and conflicts processes entail.

Express — The retailer filed for Chapter 11 protection with the intention of pursuing a going concern sale by 10 June.

EyeCare Partners — The vision care network completed its liability management deal involving $275m of new money and a discounted debt exchange that offered better terms to lenders who participated early and were involved in confidential talks with the company.

Fisker — The troubled EV company’s forbearance agreement with Heights Capital was extended  again to 17 May, with its Austrian subsidiary filing for a restructuring proceeding in Austria. The company also disclosed that a group holding over 25% of its 2026 convertible senior notes had delivered a letter seeking to accelerate repayment of the notes, stemming from an event of default as the company had missed an interest payment. Our latest coverage of the troubled EV manufacturer and the dual track process set by Heights Capital can be found here.

Gol Airlines — Gol’s Abra bondholder group recently disclosed updated members and holders including distressed investors. The bankrupt airline has said it will evaluate all recapitalization or other transactions, including to raise capital while in bankruptcy. In recent days the UCC has objected to the debtors attempts to allow aircraft lessors to sell a participation interest in their unsecured claims, while retaining their voting rights on any potential Chapter 11 plan.

Gray Television — The broadcaster announced a $250m debt repurchase plan along with Q1 24 earnings that showcased a year-on-year improvement, sending prices of its debt and shares higher.

Hearthside Food Solutions — Some par holders have sold their positions in Hearthside’s loan to Apollo Global Management, which is leading the steering committee of an ad hoc group of lenders.

Hertz — The rental car company’s capital structure took a hit after Q1 24 results outlined an acceleration of vehicle depreciation tied partially to the company’s investment in electric vehicles, with higher-than-expected cash burn and concerns over its ABS structure and future liquidity.

Incora — The judge overseeing the Incora adversary trial wants to hear arguments on the authenticity of 2026 notes issued as part of the March 2022 liability management exercise disputed in the case.

Invitae — Kirkland & Ellis defeated objections from both the UCC and UST to its proposed retention as debtor counsel. It also received approval for the sale of its assets to LabCorp and plans to file a plan and disclosure statement in the near term.

Lionsgate — The film and TV media company announced an exchange that would see a majority of its 5.5% SUNs due 2029 exchange into new notes at par that would be attributed to its yet-to-be separated Studios business, following investor concerns over the viability of the Starz business post-separation. The parties completed the exchange, with the 2029 SUNs indenture being amended to strip certain covenants and events of default.

MRP Solutions — Lenders to Clearlake Capital-backed packaging manufacturer MRP Solutions (fka Mold-Rite Packaging) are organizing.

Office Properties Income Trust — Certain holders of OPI’s senior notes due 2026 to 2031 have retained PJT Partners and Paul Weiss to help prepare a comprehensive counterproposal to the company’s recently announced exchange offers. The current exchanges are structured in a way that prioritizes an exchange of the senior notes due 2025 and are difficult to block without support from holders with at least 85% of the 2025s. 

Red Lobster — The seafood restaurant chain is seeking third party financing as it faces steep losses and debt coming due in 2026. It has also brought on a new independent board member at the behest of its lenders and there are reports that it is considering bankruptcy.

Rubio’s Restaurants — Rubio’s is considering a possible Chapter 11 bankruptcy filing in order to sell itself. A bankruptcy filing would be its second in the past four years.

rue21 — The Blue Torch-controlled fashion retailer filed a Chapter 33 before Judge Brendan Shannon of the US Bankruptcy Court for the District of Delaware. The company aims to close all stores, conduct wind-down sales, and market its IP and intangibles for a sale. The docket is available here.

SI Group — The chemical additives company recently shared preliminary 2023 results, which left some investors questioning the sustainability of its capital structure, even as its business shows signs of recovering.

SIRVA — The moving services company was downgraded by S&P from B- to CCC. The S&P note states that on 25 April, SIRVA’s first and second-lien credit agreements were “modified to pledge more equity from subsidiaries as collateral to lenders, to 100% from 65%, which we view as lenders' concerns over the company's performance and ability to manage its obligations in a difficult operating environment.” This comes after it raised a new money priming loan (per S&P a $84m delayed-draw term loan) in order to bridge the company to a broader debt restructuring.

Sonrava Health (fka Western Dental) — The New Mountain-backed company is sounding out investor interest on new funding backed by its accounts receivables balance.

Sound Inpatient Physicians — Lenders to the Summit Partners-backed medical group have extended a co-op agreement to 2 June as the company continues to explore options for raising capital.

Spirit Airlines — The troubled ultra low-cost airline reported Q1 24 earnings, disappointing but largely in line with guidance published recently, and management painted a bleak picture for Q2 and beyond. Management also announced concrete plans to survive on a standalone basis. Read our three-part series on the stressed ultra low-cost airline and its Loyalty Notes: Part 1, Part 2 and Part 3.

Staples — The Sycamore Partners-backed office supplies company announced an exchange of notes and a capital raise to address maturities through 2027. 9fin had earlier reported that the company was working with bankers at JP Morgan and Morgan Stanley to gauge investor interest in a refinancing of upcoming debt.

Steward Health Care — Steward‘s descent into bankruptcy is anything but ordinary. Listen to our podcast on how the hospital operator ended up in its current situation and the many challenges Steward and its landlord— and lender— Medical Properties Trust— have to navigate. So far, the hospital operator has been able to secure a $75m DIP from MPT as it lines up the sale of multiple hospital operations, with the potential for another $225m in DIP funding if certain sale milestones are met. Steward’s first day hearing also highlighted potential tensions with MPT as the medical property REIT’s exposure to Steward was clarified. And over in Malta, a lawyer connected to three Steward subsidiaries will be arraigned on criminal charges and summoned to court following an asset freeze order issued by Malta’s attorney general tied to a money laundering investigation.

Sunnova Energy — The commercial solar company’s bonds rebounded slightly after executives at the residential solar company did not confirm a rumored advisor hire during a first quarter earnings call.

Telesat Canada — The Canadian satellite company posted expected declines in revenue, EBITDA and margins in Q1 24, and reaffirmed guidance for the full year. Backlog and cash generation for the legacy business declined as Telesat continues to lose GEO customers and focuses on Lightspeed. Certain creditors are reported to have hired Evercore and Lincoln International for advice. 9fin earlier provided a comprehensive analysis of the company’s disappointing FY 23 earnings and FY 24 guidance.

United Site Services — The portable toilet rental company is set to tap the recent $115m commitment from sponsor Platinum Equity as it battles weaker earnings amid an inflationary and higher rate environment.

TGI Friday’s — The restaurant chain has engaged an FA to raise roughly $200m of new funding to pay down debt.

VeriFone — Lenders to the payment and commerce solutions company have organized with Gibson Dunn as they prepare for negotiations ahead of the maturity of the company’s $250m revolver and over $2bn of term loans in 2025.

Veritas Technologies — A group of creditors has begun confidential talks with the Carlyle-backed data management firm on ways to address its debt due 2025.

VistaJet — The private jet subscription company released Q4 23 results, with the company’s founder penning a letter announcing legal action against a “group of individuals” that has “disseminated half-truths, false rumors and lies”.

WeWork — WeWork continues to reject attempts from the Flow Parties, which includes Adam Neumann, the company’s former CEO, to derail its Chapter 11 case. The latest objections from the group came against the company’s proposed $450m new money exit DIP facility. The court overruled those objections and granted access to $50m so that WeWork can pay off certain administrative expenses, including attorneys’ fees. Final approval, as well as confirmation of the company’s plan, will be heard on 30 May.

Workhorse — The electric vehicle company continues to raise capital through the issuance of convertible notes and warrants and employ cost-cutting measures to address cash flow pressures. 9fin had earlier reported that the company is working with Stifel to help raise bridge financing.

Xplore — The Canadian rural internet provider kickstarted a grace period after skipping a coupon payment due at the end of March. It has been in talks with creditors and sponsor Stonepeak on ways to restructure its legacy business and fund the growth of its fiber projects.

Zayo — The telecom company announced that it is carving out two entities, including its European business and its business that manages network needs outside of the North American and European networks. After the separation, Zayo Europe will appoint a new board of directors.

Weekly declines

Top bond movers (link to full screener on 9fin)

Top loan movers (link to full screener on 9fin)