Existing first lien lenders to the optometry and ophthalmology care provider are swapping into new second out loans – but on very different terms. The ad hoc group holding 75% of the term loan was able to exchange at 88 cents on the dollar into new second out loans, while the non-ad hoc group members are currently mulling over an offer to swap at 70 cents, as 9fin reported. Second liens can swap at 55 cents into 72.5% in second out and 27.5% in third out claims, and holdouts will be relegated to a fourth out. The 18 point disparity for AHG 1Ls and non-AHG 1Ls seems to some like it’s pushing the limit – though notably the company’s first lien debt has been indicated in the 50s with the second liens in the 30s, and the deal comes with a needed $275m injection of new money first out debt open to all participating lenders.

Another example with debt quoted at similar levels, Veritas-backed EdTech company Anthology launched a deal also negotiated by an ad hoc group of first lien lenders, 9fin reported. The transaction entails raising $250m in new first out debt and exchanging existing first lien debt into a combination of new first out and second out debt with tightened documentation. The deal also anticipates the potential for further exchanges of the existing second lien term loan into third out debt. 9fin reported that as of this week the first lien term loans were quoted in the low 40s and the second liens in the mid-20s.

And rounding off the week was City Brewing, which ultimately got participation of holders of 98% of its term loan debt in a transaction launched earlier this month. The Pabst Blue Ribbon brewer moved assets into a non-guarantor restricted subsidiary and then raised a $115m new money first-out term loan issued out of that sub in another double dip, drop-down combo (see Alvaria for the other recent example) that by 9fin calculations captured nearly $50m of discount. The company first worked with an ad hoc group of lenders and the company’s revolver lenders, netting early participation of 73% of the existing first lien term loan. The ad hoc group exchanged 50% of its existing term loan holdings into the first-out exchanged term loan and 50% into the second-out exchanged term loan, both at 97 cents; while other existing first lien term loan holders exchanged 40% of their existing holdings into the first-out tranche and 60% into the second-out tranche, both at 85 cents.

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.

Michael Colodner has joined Sculptor Capital Management as a managing director after departing Balyasny Asset Management last month where he was a portfolio manager. Meanwhile, Michael Barnett a 13-year veteran of Sculptor and its predecessor Och Ziff has left the firm, according to his LinkedIn update. Paul Hastings announced adding a private equity team headed by partner Alexander Temel as global co-chair of private equity and founding member of a new Boston office. Temel joins from Sidley Austin. Cantor Fitzgerald hired Tim Bottrell to build out the firms capital solutions group from from his position of co-head of financial sponsors group at B. Riley Financial.

This week’s news

Medical Properties Trust — The REIT is considering providing bankruptcy financing of up to $300m for its distressed tenant, Steward Health Care. A bondholder group advised by Paul Weiss has selected Evercore as its financial advisor.

EyeCare Partners — The vision care network, advised by Kirkland & Ellis and Centerview, recently launched a 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. Sponsor Partners Group is also said to have moved its first lien loan holdings into a fourth-out position, which has a make whole provision that applies if EyeCare files for bankruptcy.

Anthology — The Veritas-backed ed-tech company, advised by Kirkland & Ellis, launched a liability management deal negotiated with an ad hoc group of first lien lenders. The deal involves $250m of new first lien first out debt, an exchange of existing first lien debt into first out and second out tranches and potentially the existing second lien debt into a third out tranche, and the likely relegation of non-participating lenders to fourth and fifth out status. The deal also extends the company’s revolver to early-2028.

Platinum Equity — Credit investors have a love-hate relationship with Platinum Equity. On the one hand, some lenders are pleased with the PE firm’s recent sale of Yak Access after a bruising restructuring of the company last year. On the other hand, Platinum and some creditors are mired in a legal battle over a controversial financing deal at bankrupt Incora. We delve into Platinum’s strategy, track record and fundraising efforts here.

Incora — A witness in the Incora adversary trial is being called back to the stand after a judge determined his testimony waived attorney-client privilege regarding legal advice given to him on bond indentures.

Robertshaw — Invesco has appealed an order staying its state court action as against certain non-debtor defendants in the state court case challenging the liability management transaction that occurred in December 2023. The appeal is just weeks before the scheduled start of a trial addressing the propriety of the transaction.

Carestream Dental — The CD&R and CareCapital Advisors-backed company has been working with Jefferies to address its revolver and term loan maturities this year. 9fin had earlier reported that the company had retained Kirkland & Ellis as legal counsel while lenders have organized with Davis Polk.

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

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.

Altice France — Certain secured creditors have signed a cooperation agreement that would bind their acts together for the next six months.

City Brewing — The liability management transaction, which 9fin reported on last week, closed with participation of lenders holding 98% its term loan. The transaction involved shuffling assets into a non-guarantor restricted subsidiary, raising new money at that restricted subsidiary, and a non-pro rata discounted exchange of existing debt in an attempt to boost liquidity. The company captured around $49m of discount through the term loan exchange.

Fisker — The troubled EV company is past the date (25 April) when convertible debtholder Heights Capital was set to receive an offer to purchase its holdings of senior secured convertible notes, otherwise a new CRO would be appointed. As of publishing, Fisker has yet to update the market on this aspect of the forbearance agreement. In its 10-K for FY 23, the company revealed this week it extended its forbearance with Heights to 1 May and announced the appointment of FTI Consulting’s Michael Healy as chief restructuring officer.

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.

Express — The retailer filed for Chapter 11 protection with the intention of pursuing a going concern sale by 10 June. The company received interim approval for $224m in DIP facilities, including from ReStore Capital (Hilco Global), 1903 Partners (Gordon Brothers) and First Eagle, comprised of $25m in new money and roll-up of $199m in prepetition debt facilities. The company also has a non-binding letter of intent for the sale of its operating assets to a JV owned by WHP Global, Simon Property Group, and Brookfield.

Joann — Joann’s prepackaged Chapter 11 plan was confirmed on 25 April, ahead of the milestones in the company’s DIP financing agreement. The plan reduces Joann’s debt load by approximately $505m.

Cumulus Media — The radio broadcaster’s debt exchange finally agreed with an ad hoc group of lenders is a 15 point improvement over the terms originally offered, but will result in an increase in interest expense and limited deleveraging. The ad hoc group, organized with Gibson Dunn and Guggenheim, receives a 1% PIK fee for its efforts. The company is being advised by Jones Day and with Bank of America as deal manager.

Graftech — The electrode manufacturer’s debt traded higher after executives said on earnings call that they were comfortable with the company’s liquidity position and did not anticipate borrowing against the revolver this year. 9fin had earlier reported that the company is evaluating new money proposals from third parties as it gears up for negotiations with debt investors.

Other active distressed and restructuring coverage

Astound Broadband — A group of lenders has 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.

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 9fin sources.

Bausch Health — Bausch subsidiary Salix Pharmaceuticals was able to fend off an appellate court challenge from generic competitor Norwich Pharmaceuticals regarding exclusivity of a specific patent for Xifaxan, Bausch’s drug used mainly for the treatment of irritable bowel syndrome and hepatic encephalopathy.

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-SPACed 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.

Charge Enterprises — The electric vehicle charging company remains in Chapter 11 before the US Bankruptcy Court for the District of Delaware.

CommScope — A group of largely unsecured lenders to the struggling telecommunications infrastructure company pitched new money second lien financing to repay near-term maturities.

ConvergeOne — The technology services provider filed a prepack in SDTX with an RSA signed by 81% of its first lien and second lien lenders that would see the equitization or cancellation of $1.6bn in funded debt, with first lien lenders set to receive most of the reorg equity. The first lien ad hoc group includes Silver Point, Monarch and Kennedy Lewis, while Partners Group and Siris GP HoldCo III comprise a second lien group and lenders including Palmer Square, Steele Creek and Cerberus have formed a group of “excluded lenders”.

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” but approved on a final basis.

DISH/EchoStar — 9fin reported the telecom company is sounding out interest from third-party investors on financing proposals, after nixing two proposed exchange offers. There are also reports that private credit firms have approached the company to provide financing, including to an unrestricted subsidiary.

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

Endo International — The pharmaceutical company raised a $2.5bn SOFR+450bps exit term loan in preparation for its emergence from bankruptcy. With significant customer and product concentration, and revenue outside of Endo’s branded pharmaceutical products exhibiting declines, sources have mixed feelings about the company’s prospects.

Enviva — The troubled wood pellet producer is in 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 — The Charlesbank-backed food manufacturer is looking to raise funding ahead of its debt maturities, led by a revolver due in November this year.

McAfee — A group of lenders that 9fin had reported had organized are said to have signed a cooperation agreement and also hired Centerview.

MRP Solutions — Lenders to Clearlake Capital-backed packaging manufacturer MRP Solutions (fka Mold-Rite Packaging) are organizing and are in talks with Perella Weinberg Partners, according to 9fin sources.

MyEyeDr — The Goldman Sachs-backed vision care chain is regaining the confidence of investors with its latest refinancing thanks to a new slug of preferred equity and improved finances.

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.

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.

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 has raised between $70m to $80m via a new money priming 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 — Read our three-part series on the stressed ultra low-cost airline and its 8% senior secured notes due 2025 — the Loyalty Notes: Part 1, Part 2 and Part 3.

Staples — The Sycamore Partners-backed office supplies company is working with bankers at JP Morgan and Morgan Stanley to gauge investor interest in a refinancing of upcoming debt.

Steward Health Care — A 9fin analysis outlines that Medical Property Trust’s total economic exposure to Steward could be as much as $4.8bn across its real estate investments, loans, unpaid rent, and minority equity investment as the struggling health operator approaches a 30 April forbearance agreement expiration with its ABL lenders.

Telesat Canada — 9fin provided a comprehensive analysis of the company’s recent disappointing earnings and guidance, which caused the company’s bonds and equity to fall sharply.

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

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

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

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”.

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

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.

Weekly declines

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

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