Benchmark prior transactions, bonds, loans or company profiles using over 300 credit metrics.

Comparables

AI transcripts & instant analysis, making earnings season easier than ever.

Earnings

A full suite of ESG data and analysis. Built for your workflow

Spot undervalued credits and potential future restructurings with our purpose-built tools.

Distressed and Restructuring

Full Financial profiles with 3 statements, KPIs, segment splits & credit metrics. All traced to source documents.

Financials

New deal analysis and covenant comparison tools, understand key risks in seconds not days.

Covenants

Say goodbye to CTRL + F with our powerful search. Thousands of documents text searchable for any keyword or phrase.

Search

We've successfully predicted more than 65 price sensitive events - before they happened.

Deal predictions

We use AI to aggregate newsflow from 2,000 sources, and deliver it to your inbox quicker than anyone else.

News

Track high yield deals from issuance through to maturity, with integrated legal, credit and ESG analysis.

High Yield Bonds

Shine a light on private markets with 9fin's news and legal analysis of syndicated loans

Leveraged Loans

21st century tech and expert analysis to help CLO teams make informed decisions faster.

Structured Credit 

Find information others can't see in one of the fastest growing corners of finance

Private Credit 

Chris Haffenden

Suddenly the world seems a much less stressful place for investors.

While J Pow’s statement was, in the main, little changed from the last FOMC meeting, the phrase that the ‘disinflation process has started’ was enough to provide more fodder to the bulls — who remarkably think inflation will come down to below 2.5% in 2023, and that the Fed will be well into its cutting cycle by then.

Comments from central bankers are becoming less hawkish, raising expectations and inflating risk asset prices. In January, European High Yield and leveraged loans returned over 4%, and after the Fed and ECB meetings this week, the iTraxx crossover is another 40 bps tighter, at 384bps at the time of writing.

Whether you think there is further juice in this rally or not, the easy part of the move is probably over.

While LBO activity is light for now, the improved financial conditions are also likely to spark a wave of pent up M&A activity. Witness KKR’s offer for TIM’s Netco yesterday, and the potential combination of Groupe Casino’s distribution business with TERACT.

HY primary is back in play, with Stena and ZF showing how strong demand is for double-B credits at sixes and sevens. But how deep is the demand going to be for €1bn-plus single-B LBOs?

The 2023 recovery is feeding through into European stressed/distressed, as I discovered when pulling the data this week for our latest Top of the Flops report which clients can view here and you can also request a copy here if you are not a client.  The number of bonds and loans trading at stressed/distressed levels dropped markedly in January.

As of the end of January, we found 149 bonds from 110 issuers with a spread-to-worst (STW) of 800bps or more (our definition of stressed and/or distressed). That’s 60 bonds/25 borrowers fewer than at the end of December.

For wider context, these numbers have more than halved since the worst point of 2022, in mid-July, when we counted 318 bonds from 199 issuers trading at stressed levels. The STW rose for only 13 bonds in January, with notable movers including Matalan, Aggregate, Lowell, and Zenith Leasedrive.

Breaking this down further, there are 68 stressed bonds from 58 issuers, down sharply from 72 issuers at year-end. The number of distressed names also fell, but less so. There are 77 distressed bonds from 56 borrowers, down 21 and 10 respectively.

There was also a sharp drop in the number of loans priced below 92 (our measure of stressed/distressed) at 141 loans from 91 borrowers. This compares to 207 loans from 128 issuers at the end of 2022. From this sample, 51 issuers are stressed, down from 82 a month earlier. There are 40 distressed issuers, from 56 at the end of December.

So, yet again, have we forecasted another restructuring wave which has failed to materialise — not dissimilar to the conditions when I joined 9fin in the second half of 2020.

My gut feel is that we will still have a wave; it just might not be the big Kahuna we thought we saw on the horizon in September 2022. Energy costs and supply chain issues are receding, but higher rates will still have an effect on strained capital structures, and not all companies will have navigated the storm in the second half of 2022 without taking on some water.

Our team still has a whole ocean of names to fish from. There are plenty of problematic issuers with potential trigger events in the next couple of years.

In total, we count 31 loans from 21 borrowers, with maturities less than 36 months from now and trading below 85. Those are likely to result in an amend-and-extend at best.

Some 40 European HY bonds with maturities of less than 36-months are stressed/distressed from 31 issuers, with the majority (29 from 27) being distressed.

Not all will end up in restructuring, but there will still be plenty for us to cover.

I spent a lot of time this week working on articles about creditor-on-creditor violence, which should be published soon. The TLDR is that coercive and priming transactions — which have almost exclusively happened in the US — could soon spread to Europe and beyond, albeit with some significant differences.

As we outlined in our 2023 distressed and restructuring preview:

“Most advisors admit that there is a lot of activity already going in the background in Europe, advising sponsors on the art of the possible. Distressed funds, private credit and special sits funds have been proactively approaching sponsors with ideas.”

Previously, in scary cases such as KKR’s Envision, stateside lenders suddenly found themselves on the wrong side of a privately negotiated deal and primed by others in their same class.

One of the companies high on our list of possible candidates outside the US was GenesisCare. The Australia-based oncology care operator has struggled after acquiring 21 Century out of Chapter 11 in 2020, a giant deal that was almost entirely funded by debt.

GenesisCare is burning cash at an alarming rate, and has bridge loans — provided by shareholders KKR and China Resources and originally intended to be repaid with proceeds from the sale of their cardiology business last August — coming due in November. But at current burn rates, the company’s funds are unlikely to last beyond this summer.

Meanwhile, an increasingly frustrated set of lenders is bemoaning the company’s general lack of engagement — and many are unable to sell out of the credit, given a tight white list. Lenders appointed Akin Gump and Houlihan Lokey in October; across the wall, our loans team had reviewed the loan docs months earlier, at the request of one worried creditor.

Restructuring advisors have tipped us off to loopholes in the docs that might allow GenesisCare’s sponsor KKR (plus China Resources and its physicians) to providing financing in ways that could prime existing lenders. So when we saw reports that Oaktree had approached GenesisCare with a funding proposal, our first thoughts were that this was likely to be a drop-down transaction.

But there was a conflicting report in The Australian this week, saying that GenesisCare is close to filing for Chapter 11. The article said that a meeting with lenders was expected to take place this week; it also suggested a likely outcome could be that KKR or another shareholder would buy lenders out at a discount, in a recapitalisation deal.

Not so, according to the latest report from our very own Bianca Boorer. The Australian article is “unsubstantiated”, and lenders have not been informed about a meeting with GenesisCare, despite their “eagerness for the company to engage” in talks, her sources said.

“The last I heard they had enough cash to make it to the summer,” said one GenesisCare lender, who also hadn’t been informed of a lender meeting.

So, what is happening? The company side is being tight-lipped, and I’m reminded of comments by Justice Richard Snowden in his Virgin Active judgment: “If you are not sitting at the table, that is because you are lunch”.

Less than a week after stakeholder talks broke down, CDC returned to the negotiating table and struck a deal to provide new money for Orpea, the distressed French Care Home operator. The Guns (a group of unsecured creditors) are backstopping a €195m top-up to the French state fund’s injection, taking the total for this component of the deal to €1.555bn.

Through a combination of preferred and ordinary shares, CDC is getting what it wanted: 50.2% control. The two camps appear to have split the difference on valuation, and the projected recoveries to unsecured holders, who are being fully equitised, are 30%.

The capital increase is in three stages: firstly, there is a full equitisation of the €3.8bn of unsecured debt; a second capital increase will see €1.155bn coming in from CDC; the third €400m raise is open to existing shareholders.

Unsecured creditors will get 49.4% of the equity, in return for extinguishing €3.8bn of debt. This allows Orpea to reduce its total debt burden by over 60%, but the business will still be 6.5x levered by FY25: this, as 9fin’s Denitsa Stoyanova has pointed out, was an ambitious target even before CDC stepped in and pushed back on Orpea’s intention to boost margins from 15% to 20%.

Note that Orpea’s peer Korian trades at around 7-8x EV/EBITDA. If Orpea fails to deliver on its turnaround plan, we might end up watching another French zombie movie like Les Revenants.

Sticking with the French cinema theme, Bloomberg had the advisory mandate scoop for Technicolor Creative Studios (TCS). Rothschild & Co has been appointed to help raise funds for the Technicolor spin-off, which got into distress just two months after the split from its parent. Technicolor itself emerged from Sauvegarde in 2020, a spectacular turnaround story.

TCS completed its spin off from Technicolor in mid-September, and refinanced its debt by agreeing a €624m-equivalent TLB with its former lender consortium.

It has three main business sectors: MPC, which specialises in VFX, animation and visualisation for movies; The Mill, focusing on advertising campaigns; and Mikros Animation, which works on animated films.

TCS was meant to have been the crown jewel, but in November management dropped a bombshell, revising 2022 adjusted EBITDA down from €120-130m to just €50-70m.

This means the company is highly likely to breach leverage covenants at its first test, on 30 June 2023. To meet its covenant of maximum 5.75x net leverage, it must generate annual adjusted EBITDA of over €100m.

That’s assuming liquidity remains constant — and in reality, it is dwindling. Free cash flow turned sharply negative in the third quarter, with just €24m of cash and cash equivalents as of 30 September 2022.

The company blamed the poor performance on its inability to hire and retain key talent, and on a slowdown in advertising markets; it also cautioned that the poor performance would continue into 2023.

A independent review has been launched, with a major audit firm appointed, and a senior advisor has been tasked with advising and devising a recovery programme.

There was another blow to the controversial Texas Two-Step this week (no, it’s not a line dancing move).

Texas law allows liabilities to be separated from assets by placing them into a new entity. This means that tort liabilities can be transferred into a SPV, which then files for insolvency — claims can then be resolved through the bankruptcy process, without any recourse to the original company. This is extremely useful if the potential exposure is open-ended.

Many lawyers believe that the Texas Two-Step is an abuse of the bankruptcy process, and argue that it denies claimants the right to put companies through a jury trial; companies argue it helps speed up settlements, but some lawyers believe it removes the incentive for corporations to come to the negotiating table.

Johnson & Johnson was seen as one of the aggressive proponents of the two-step. It set up LTL Management in October 2021 to deal with cancer claims arising from its talcum powder, which was allegedly found to contain traces of asbestos, by placing $2bn in trust.

In 2018, J&J was ordered to pay $4.8bn in damages to one group of Missouri women. The award was later reduced to $2bn on appeal, but there are still around 38,000 lawsuits outstanding — with potential awards estimated to be over $100bn.

This giant consumer products company is not in distress, and should be able to meet damages payments over time. As such, its decision to ring-fence its liabilities and cap the overall payout has been widely criticised.

And this week, the Third US Circuit of Appeals dismissed LTL’s bankruptcy petition:

“While LTL faces substantial future talc liability, its funding backstop plainly mitigates any financial distress,” said Judge Thomas Ambro in his ruling. “For here the debtor was in no financial distress when it sought Chapter 11 protection.”

“To ignore a parent (and grandparent) safety net shielding all liability then foreseen would allow tunnel vision to create a legal blind spot. We will not do so.”

He added that wanting to protect the J&J brand and “comprehensively resolve litigation” was not an appropriate use of the bankruptcy system.

Johnson & Johnson said it will appeal the decision. In October 2021, the company said it had spent $1bn in defense costs for the litigation, with lawyers billing up to $1,450 per hour. Nice work if you can get it.

Ahead of Adler Group UK’s restructuring convening hearing, which is slated for next week, we’ve been thinking about how it might be able to cram down a group of dissenting bondholders — mostly holders of the longer-dated 2029 bonds, who are expected to challenge class composition.

To recap: Adler Group reached an agreement over €937.5m of senior secured 2025 PIK funding from a select noteholder group, with proceeds primarily to repay the 2023 and 2024 maturities of the company’s subsidiary Adler Real Estate.

Adler failed to secure consent from the 2029 holders for its consent solicitation, but it did have over 75% in total (by value and number) across the six debt issues. After some delay, the company said it would use a UK Restructuring Plan as an alternative means of implementation.

The 2029 Ad Hoc Group believes the plan favours shorter-dated holders, most notably the Adler Group 2024 notes. Their status was elevated to second-ranking, alongside the Schuldschein and the 2023 converts (the other SUNs are third-ranking), as illustrated below:

This week, the AHG issued a counterproposal.

Under their plan, the new money will remain first-ranking and still rank ahead of the other Adler Group debt; but all the other debt will rank second and mature in June 2026. There is also the ability to tender notes at 60 cents from disposal proceeds.

They claim this will give greater runway for the group to maximise asset realisations, and provide optionality to all creditors by providing a de facto hard floor and off-ramp to those who are more doubtful over the value of the underlying assets. The plan adds that shorter dated notes continue to be favoured, as over-subscription would see proceeds allocated to 2024 notes first.

Our read is that the 2029s are prepping themselves to challenge class composition at the convening hearing for the UK RP, providing a relevant alternative for the court to consider.

Class composition could be critical to getting the deal through. Will the 2029s be lumped into the same class of the other Adler Group SUNs? This could allow a 75% vote to go through without the need for a cross-class cramdown.

But we can see merits in the 2024s being put in a separate class given their elevation. Could they be used to cram down the others? That would be an interesting move. The 2029s could also push to be treated as a separate class. Temporal seniority issues could come to the fore, which could set useful case precedents.

We suspect the courtroom will be full, and we will be there early to secure a back-row seat.

We hear that Food Delivery Brands (Telepizza) is close to reaching agreement with bondholders over a debt/equity swap. However, Cinco Dias reports that a potential stumbling block is forcing ICO (which guarantees a €40m facility from Santander) to take a haircut. Around €60m of new money is required, and bondholders are expected to take control.

STOP PRESS: The company just announced an agreement for a debt recapitalisation, whose details were omitted from the release. Our journalists are on the hunt for more.

After months of wrangling between shareholders and bondholders, DOF ASA has finally decided to file for insolvency, opening reconstruction proceedings in the Hordaland District Court.

After months of delays, Metalcorp is set to load its first shipment of Guinean bauxite onto a ship, which is currently in port near the company’s mine in the country, as detailed by 9fin’s David Orbay-Graves. Metalcorp has not identified the purchaser, but previously said the delivery is going to China.

The company is expected to receive in the region of €30m for the one million tonnes of bauxite, as disclosed in a bondholder call last year. However, it will receive payments in instalments, as the multiple shipments gradually depart Guinea and arrive at their destination.

Frigoglass this week released a business update, as it issued another €10m of 2023 super-senior bridge notes.

Some of the terms of the lock-up agreement have changed, most notably increases in the super senior note sizes and a reduction of reinstated notes to €150m from €165m. The company also announced it will not be paying the 1 February bond coupon.

Events at Adani dominated our reading this week. After Hindenberg’s short seller report, the company issued a huge 413-page response, calling the short-seller the “Madoffs of Manhattan.”

Despite a collapsing share price, Adani managed to get away a $1bn Follow-on Public Offer, but then decided to “protect the interest of its investing community” by withdrawing the proceeds. The board said that “going ahead with the issue would not be morally correct.”

Adani claimed that the moves were unprecedented, as if the huge rally that came before that was normal:

The share price continues to feel pressure. But now at INR 1,531 it is surely much better value, given the new P/E ratio of a mere 140.5x.

We suspect Adani is too big to fail, and to be fair it has some decent hard infrastructure assets. But some international banks may be sweating their margin loan exposure. Adam Tooze provides a cracking analysis of Adani’s links to Modi and the local banking system.

There is also the question of the share offering. If it is deemed to have closed, and Adani subsequently goes into restructuring, do these creditors have a claim?

It takes a lot to keep Elon off the main headlines, especially given that his taking-Tesla-private-at-420 trial is ongoing. The Business Law Prof Blog has a great summary of the issues, and meanwhile this deep dive from the Guardian — ’Tears, Blunders and Chaos’ — takes a look what is happening at Twitter post staff departures.

And finally, some Brighton & Hove Albion news:

Mitoma’s fantastic last minute winner to beat Liverpool 2-1 last Sunday is even better with Japanese commentary.

Midfielder Moises Caicedo was given the weekend off, as he tried to engineer a £75m move to Arsenal, but the club refused to engage.

Plus, it is never wise to play poker with our owner Tony Bloom:

Bournemouth at Home tomorrow, what sort of reception will Moises get?

“Caicedo, ah ha. He came from Ecuador, To win the Ballon d'Or, Caicedo”

Friday Workout — Stress levels ease; Texas no-step; Les Revenants(9fin)

Owen Sanderson

Excess Spread — Sweet release, baked Danish

9fin team

Webinar Replay — Free fallin': Chapter 11 trends that defined 2025 and what's next

Sasha Padbidri

Luke Viner

The Singapore cross-class cramdown provision’s future is now

Webinar Replay — The art of the LME: defining trends in 2025, and looking ahead to what’s next

Save time, react faster to news, outperform your peers.

Asset Managers & Hedge funds

Save time, pitch more efficiently, and win business.

Investment Banks

Turbocharge your trading desk P&L, with the market's fastest news alerts.

Sales & Trading

Spot novel covenants, save time drafting and win business.

🍪 Our Cookies

Friday Workout — Stress levels ease; Texas no-step; Les Revenants(9fin)

Read all our public content for free

Recently Published

Excess Spread — Sweet release, baked Danish

Webinar Replay — Free fallin': Chapter 11 trends that defined 2025 and what's next

The Singapore cross-class cramdown provision’s future is now

Webinar Replay — The art of the LME: defining trends in 2025, and looking ahead to what’s next

What are you waiting for?