Since then, MPT’s debt and equity have largely improved, despite some ups and downs. The equity in particular jumped this week after announcements that both Steward and another tenant Prospect Medical had made progress on key asset sales, which encouraged hope that MPT can monetize its stake in another asset, PHP Holdings. The progress on these efforts have improved the likelihood of MPT hitting its goal of raising $2bn in liquidity this year.

News on Steward, however, has been decidedly more mixed. Multiple news outlets have keyed in on a particular bat guano problem at one of its hospitals in Florida, while US Senators from Massachusetts have ramped up their pressure and rhetoric to get Steward out of their state. 9fin also reported that Steward’s recently divulged deal to sell its physician network business to UnitedHealth’s Optum unit is actually a non-binding agreement that has myriad hurdles to completion.

Between landlord and tenant, regulators and businesses, creditors and advisors, debt and equity — and an active short seller targeting MPT — the situation will be one where no party has all of the information sometimes necessary to make key decisions. Good business journalism will strive to fill in the gaps in coming weeks.

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.

A full group of finance attorneys joined Paul Hastings leaving Vinson & Elkins in Dallas and Houston this week including Erec Winandy, Brian Moss, Cris Dewar, Guy Gribov, Bailey Pham, James Longhofer, Rafael Alvarado, and Alex Cross.

Lauren Bilzin joined Paul Weiss’s restructuring department and hybrid capital & special situations practice on 20 February as a partner, leaving her role as head of US restructuring at Davidson Kempner.

The Default Notice is produced by 9fin’s distressed and restructuring team: Max Frumes | max.frumes@9fin.com, Rachel Butt | rachel@9fin.com, Max Reyes | max.reyes@9fin.com, Kartikeya Dar | kartik@9fin.com and Larry Feldman | larry@9fin.com

This week’s news

Steward Health Care — The physician-owned company has struck a deal to offload its physician network to UnitedHealth's Optum Care, with a proposal to close by the end of second quarter of this year. However, US legislators responded to the news with words of caution and 9fin reported that the deal was non-binding.

Fisker — Certain convertible debtholders are organizing with Milbank after the electric vehicle maker warned it could end up restructuring.

Graftech — The graphite electrodes producer is evaluating new money proposals from third parties as it gears up for negotiations with debt investors. While its liquidity is adequate for the year, its runway could be pressured if earnings continue to be weak and competition ramps up from China.

Bausch Health — The healthcare giant is gearing up for a liability management transaction in the coming months in a bid to bring down leverage. As of YE 23, Bausch had roughly $2.6bn of debt coming due in 2025, followed by $737m of unsecured notes due in 2026. 

Private credit restructurings — SmileDirectClub, a once high-flying startup, is heading towards a liquidation after failing to get its lenders on board with a founders-led bid during bankruptcy. The company is one example of what's happening in private credit portfolios.

Michaels Stores — The Apollo-backed retailer reported an encouraging jump in fourth quarter EBITDA this week, as lower shipping costs drove a huge increase in gross margins.

Telesat Canada — The Canadian satellite operator released FY 23 earnings and is guiding to a weak FY 24. Its legacy geostationary equatorial orbit division is floundering amid customers migrating to low earth orbit (LEO) satellite offerings, cord-cutting impacting demand and contract renewals at lower rates. Lightspeed, Telesat’s own LEO offering, is expected to launch only in 2026, and, together with C$1.25bn of cash, is housed in unrestricted subsidiaries the existing debt does not have access to. The company’s bonds and equity fell sharply in response.

Global Medical Response — The KKR-backed company posted strong fourth quarter results, boosting its prospect of a potential refinancing ahead of a its debt due in 2025.

Incora — The latest testimony in the aerospace parts supplier’s adversary trial offered a closer look at how Golden Gate Capital navigated organizing with other lenders ahead of the disputed March 2022 uptiering transaction central to the case.

Asurion — The electronics insurance and repair company’s term loans traded lower after the firm asked lenders for permission to delay its earnings report so that it can investigate a non-compliance allegation, according to 9finsources.

CURO Group — In a pre-pack led by Oaktree, Caspian Capital and Empyrean, the consumer finance company filed for Chapter 11 in SDTX with a plan that calls for the equitization of most of its secured debt and an effective date within 120 days post-petition. The filing came with a $70m DIP that Judge Marvin Isgur noted was “very expensive.”

Hawaiian Electric — A federal court remanded various cases related to the state utility’s potential wildfire liabilities back to a state court in a blow for the defendants, with Judge Jill Otake basing her decision on an analysis of the Multiparty, Multiform Trial Jurisdiction Act of 2002 (MMTJA).

Cumulus Media — Cumulus Media again extended the deadline for its proposed exchange, disclosing that holders of just $15m of its bonds agreed to exchange. Bloomberg reported this week that the creditor group is in discussions with the company. 9fin previously reported creditors holding a majority of the company’s term loans and secured bonds entered into a co-op agreement in response to what lenders are calling an “aggressive” exchange offer.

Aventiv Technologies — The Platinum Equity-backed prison phone operator finalized the previously announced deal with 100% of its lenders to either sell the business or equitize outstanding loans to hand control to lenders, remaining out of court for the first part of this process.

Altice France — After last week’s ultimatum which saw bonds prices plummet, 9fin looked at just how much value could be stripped from creditors. In our legal analysis we learned there is substantial room to designate more assets as unrestricted subsidiaries. Based on our own back-of-the-envelope calculations the builder basket has built up well over €10bn in capacity.

Ardagh — A crossholder group of the Irish packaging producer’s unsecured notes and ARD Finance PIK notes has started to amass a considerable number of creditors, 9fin reported this week, looking to force the company to deal with its capital structure in a much more holistic manner rather than focusing on the immediate problem of the roughly €3.2bn of debt maturing in 2025 and 2026.

Intrum Justitia — The Swedish debt purchaser hosted an investor call on Monday in an attempt to calm investors. But, after rehashing management’s view on the credit’s value proposition, very few specifics in regards to how the potential restructuring (or else) may look were provided. 9fin investigated just How is Intrum’s big Italian deal doing? and reported on the CDS trades put on by hedge funds in the short-dated bonds.

Spirit Airlines — 9fin will publish next week its deep dive into the low cost carrier’s debt refinancing options, after the termination of its proposed merger with JetBlue Airways. It is reported that Spirit’s $1.1bn senior secured bonds due 2025 — the largest near-term maturity — may have a novel ‘triple-dip’ claim.

Russell Investments — The investment services firm owned by private equity firms TA Associates and Reverence Capital Partners is still working on its amend-and-extend deal to address its upcoming 2025 term loan maturity.

Other active distressed and restructuring coverage

Joann — The retailer commenced a prepackaged Chapter 11 case with a transaction support agreement entered into with its lenders and majority equity holders. It aims to exit bankruptcy by early May. Here is a summary of the key restructuring terms.

Robertshaw — The electronic components and systems maker received final DIP financing and bidding procedures approval from Judge Lopez, while entering into a settlement with a group of lenders aggrieved of its May 2023 uptiering.

WW International — 9fin has reported on how weight loss drugs are hurting brands like Weight Watchers and Herbalife, and how Oprah Winfrey is at the center of it all.

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

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.

Rubio’s Restaurants — Known for its fish tacos, 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.

McAfee — A group of lenders to the struggling cyber security software provider — that 9fin had reported had organized with Akin Gump — are said to have signed a cooperation agreement and also hired Centerview.

Astound Broadband — Astound has hired advisors to engage with lenders on inbound liability management proposals.

Avison Young — The commercial real estate firm’s distressed exchange has brought some breathing room and reduced its total debt burden from around C$1.3bn to C$590m, but its capital structure remains "unsustainable" due to the high cost of the new debt and preferred equity, according to a recent report from S&P.

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 bankruptcy court passed a final order authorizing the $150m DIP. The de-SPACed healthcare services provider had filed for bankruptcy with a restructuring support agreement from holders of around 86% of its secured debt and 92% of the senior notes.

Charge Enterprises — The electric vehicle charging company filed for Chapter 11 before the US Bankruptcy Court for the District of Delaware, and virtually all first day motions were approved. It had previously inked a restructuring support agreement with Arena, its sole holder of funded debt, which intends to provide a $10m DIP facility and equitize prepetition debt.

CommScope — Unsecured lenders to the struggling telecommunications infrastructure company were reported to have pitched new money second lien financing to repay near-term maturities. 9fin had previously reported on a new money proposal from a secured lender group. The company recently disclosed dismal Q4 23 numbers.

DISH/EchoStar — 9fin had previously reported the telecom company is sounding out interest from third-party investors on financing proposals, after nixing two proposed exchange offers.

Emergent BioSolutions — The life sciences company disclosed a forbearance agreement with its secured lenders through 30 April 2024 as newly appointed CEO Joseph Papa takes the reigns amid an effort to stabilize the business and address the capital structure.

Enviva — The troubled wood pellet producer filed for bankruptcy before the US Bankruptcy Court for the Eastern District of Virginia.

Gol — 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.

Hearthside Food Solutions — A group of lenders signed a cooperation agreement to bind themselves in looming debt talks with the US food maker.

Office Properties Income Trust — The office REIT continues to evaluate raising debt against its over $3bn of unencumbered assets, as it chips away at its maturity wall.

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 outsourced moving services provider has engaged advisors to explore options as it deals with a heavy debt burden and weak performance.

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

Staples — The Sycamore Partners-backed company’s bonds popped on encouraging Q423 guidance, boosting investor confidence on its refinancing prospects.

Thrasio — The Amazon aggregator filed for bankruptcy following stalled demand growth and liquidity pressure post the pandemic-fueled e-commerce boom. The bankruptcy court provided interim approval for a $360m DIP facility.

United Site Services — Certain lenders to the portable toilet rental company have banded together with Akin Gump and Moelis, as the company battles weaker earnings amid an inflationary and higher rate environment.

Veritas Technology — Creditors will look forward to LME proposals to address 2025 maturities alongside a complicated M&A transaction.

Workhorse — The electric vehicle company is working with Stifel to help raise bridge financing as it combats cash flow pressures.

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.

Xplore — The Stonepeak-backed company agreed to a standstill agreement with creditors to allow for negotiations to continue ahead of an interest payment this month. The company is considering putting its legacy business through bankruptcy in Canada and is seeking around $400m of capital. 9fin earlier reported on options being discussed to recapitalize the business and an asset drop-down Xplore completed late last year.

Weekly declines:

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

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