Internet Brands and its sponsor KKR have denied certain secondary trades attempted by hedge funds in the company’s loans recently, according to several 9fin sources. The sponsor meanwhile has assured market participants there are no plans to pursue an aggressive liability management exercise.
Private equity sponsors have frequently sought out ways to block firms from buying their portfolio companies’ debt for a number of reasons. KKR has indicated to lenders that the business remains fundamentally sound, the sources said.
KKR declined to comment.
The apparent disconnect between KKR’s messaging that there’s nothing going on along with the amount of blocked trades has fueled skepticism among investors, particularly as the company’s debt continues to trade at distressed levels. The roughly $2bn term loan B due 2031 is currently indicated around 69, down sharply from 86 in January, while the $2.9bn term loan due 2028 is indicated in the mid-80s, according to 9fin data.
The trading restrictions come as some existing lenders have been net sellers, according to sources, and several opportunistic funds have managed to accumulate positions and would be expected to push for improved economics relative to existing crossholders in any future refinancing of the 2028 maturity.
Advisory conversations are already underway among creditors to negotiate an amend-and-extend, though no official groups have formed, these sources said, and there is meaningful crossover ownership between the 2028 and 2031 tranches.
Internet Brands reported Q4 2025 revenue of $695m, up 8% year-over-year, and adjusted EBITDA of $274m, up 5%, according to the company’s earnings release. Management guided to continued, albeit modest, growth in 2026.
Moody’s affirmed the company’s B2 corporate family rating with a stable outlook in January, citing expectations for low single-digit revenue and EBITDA growth and continued strong liquidity. The agency also noted the company’s high leverage and exposure to technological disruption, particularly from AI-driven changes in content consumption .
The company’s capital structure includes $2.9bn remaining on its term loan due 2028, a $2bn term loan due 2031, and a $575m second lien loan due 2029.
The current dynamic — restricting trading while downplaying the need for action — echoes patterns seen in other sponsor-led liability management situations, where controlling the creditor base has been a key precursor to executing transactions with select groups.
Internet Brands did not respond to a request for comment by press time.
