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The best performing distressed bond of a broadcaster or media company in the last three months might very well be…Allen Media?
Levered broadcast and media issuers including Allen Media, Cox Media, E.W. Scripps, Gray Television, and Sinclair Broadcast Group have all seen their debt trade off this year into the 50s and 60s.
inreported in March, business models that are reliant on advertising revenues — even with an increase in retransmission fees — continue to come under pressure. And while 2024 could help due to political ad spending in a presidential election year, it has not helped the companies avoid heading into deeper distressed territory with the inevitable cord cutting.
Allen Media is always a roller-coaster with its quixotic, eponymous CEO Byron Allen. But the company’s bondsjumped this week after Allen made bold claims about its projected EBITDA for 2024 and its cost-cutting measures:
E.W. Scripps will report first-quarter 2024 operating results after the markets close on Thursday, 9 May, but in the meantime, its 5.375% senior notes due 2031 are indicated in the mid-50s from the 70s three months ago:
Cox Media’s $1bn in senior notes due 2027 similarly remain near lows around 60, down 15 points in the past 90 days:
Sinclair’s 5.5% unsecured notes due 2030 are in the mid-60s versus the high 70s in January:
Gray Television’s 4.75% senior notes due 2030 find themselves in the 50s versus near 80 in January:
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.
Allen & OveryhiredKaren McMaster as a partner in its London office away from Milbank to grow the firm's restructuring practice and expand its global private capital group. Ankit Dalal will be joining the Moelis restructuring advisor group as a managing director this summer after four and a half years as a managing director at Evercore. Alessia Pirolo has joined 9fin as interim private credit editor in London from React News.
Incora — Judge Marvin Isgur allowed limited testimony from a Milbank lawyer who could speak to the closing of the aerospace parts supplier’s 2022 uptiering transaction. But questioning of that witness by counsel to the debtor showed just how challenging it can be to put a lawyer on the stand. Meanwhile, successful mediation of the dispute looks increasingly unlikely.
City Brewing — The company launched a deal with support of certain existing creditors that would provide more breathing room to the privately held beverage maker, with the consent deadline next week. The deal involves shuffling assets into a non-guarantor restricted subsidiary, raising $120m of new money at that restricted subsidiary, and pursuing a non-pro rata discounted exchange of existing debt in an attempt to boost liquidity. All of the company’s existing revolver lenders and around 73% of the existing first lien term loan holders are on board.
WW International — Certain creditors, which organized with Gibson Dunn, have signed a cooperation agreement to work together ahead of potential debt talks with the beleaguered diet company.
Brightspeed — Certain senior noteholders at Embarq, a subsidiary of Apollo-owned telecom company Brightspeed, have appealed a judgment that thwarted their attempt to seek redress for their subordination in an LBO in 2022. The dispute stems from the $5.5bn of LBO debt at Embarq’s parent being provided liens over assets of and guarantees from certain unrestricted subsidiaries of Embarq, which the Embarq noteholders claim breached their indenture.
Thrasio— The Amazon aggregator’s amended disclosure statement was approved by Judge Gravelle. The approved disclosure statement contains details of the disinterested directors’ investigation into potential claims and releases and the committee of unsecured creditors’ (UCC’s) investigation and concerns, and a recommendation from the UCC to reject the plan and opt out of the releases.
Global Medical Response — The medical transport company’s proposed $948m preferred equity raise has drawn demand from its private equity backer KKR and existing second lenders, including Ares.
Medical Properties Trust — The REIT amended its revolving credit facility and term loan credit agreement to give it flexibility were one of its tenants to file for bankruptcy, filings show. This follows the company’s sale of 75% of its ownership in five Utah-based general acute care facilities to a JV with an investment fund of Blue Owl.
Altice France— Gibson Dunn and Rothschild are continuing to corral secured creditor signatures for a co-op agreement in preparation for potential debt talks with the telecom company. Two cross-holder groups are also evaluating options.
Ardagh— The Irish packaging producer dropped a bombshell priming deal to refinance its $700m 2025 SSNs with Apollo — see our analysis here. . 9fin had previously reported that a crossholder group of the unsecured notes and ARD Finance PIK notes has started to amass a considerable number of creditors.
Barnes & Noble Education— Shares of the education industry solutions provider fell as much as 70% following a dilutive equity injection that would see $75m in net proceeds enter the company’s coffers, stemming from a direct equity investment and fully backstopped rights offering by Immersion Corp. Second lien lenders would also convert their holdings into common shares, with the transaction subject to shareholder approval and expected to close in June 2024.
Michaels Stores— The bonds of Apollo-backed retailer traded up following an S&P upgrade after the companyreported an encouraging jump in fourth quarter EBITDA.
Hawaiian Electric— The office of Hawaii Attorney General Anne Lopez released its first phase report related to the Maui wildfires and how state and county governments responded. 9fin had earlier reported that 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.
Cumulus Media — The radio broadcaster has finally agreed exchange terms with an ad hoc group of lenders holding 97% of its term loan and 80% of its notes. Lenders are set to exchange at 94 cents (up from 80 cents) into a SOFR+500bps term loan and 8% (down from 8.75%) notes with maturities extended by three years. The notes exchange deadline is on 1 May, and the exchange goes through only if at least 95% of the notes are tendered. The ad hoc group will receive a 1% PIK fee for its efforts.
EyeCare Partners — The Partners Group-owned vision care network, advised by Kirkland & Ellis and Centerview, was reported to be close to a new money and discounted debt exchange deal with an ad hoc group of lenders represented by Evercore and Gibson Dunn.
Other active distressed and restructuring coverage
Alvaria —The call center software company completed a priming capital raise with existing lenders that represents yet another innovation in the world of liability management. Some are calling it the ‘At Home plus J. Crew’ or the ‘double-dip plus’, after the predecessor transactions that paved the way for it.
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.
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.
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”.
DISH/EchoStar — 9fin 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 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.
Fisker — The companysaid it hired Deutsche Bank and PJT Partners to serve as financial advisors as it continues to evaluate strategic alternatives. The company also disclosed that it had entered into a forbearance agreement with Heights Capital Management that runs through 21 April.
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.
Graftech— 9fin has reported the company is evaluating new money proposals from third parties as it gears up for negotiations with debt investors.
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.
Jo-Ann Stores — We break down the recent DIP financing package obtained by the struggling retailer, as well as how it compares to recent DIP financings in our newly established DIP financing tracker.
McAfee — A group of lenders that 9fin had reported had organized are said to have signed a cooperation agreement and also hiredCenterview.
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.
Rackspace Technology— The cloud computing company disclosed final results of the public debt exchange it had launched in March for its senior secured notes. The company had earlier said it had secured $275m in new money from existing creditors, as part of a private debt exchange. Of the co-op group that participated in the private exchange, lenders that backstopped new money received better treatment than those that didn’t. The public exchange provided non-co-op group lenders terms worse than those offered to the co-op group.
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.
Robertshaw— The next hearing in the appliance parts maker’s adversary trial is scheduled for 30 April. The electronic components and systems maker earlier 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.
Rubio’sRestaurants — 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.
Russell Investments— The investment services firm owned by private equity firms TA Associates and Reverence Capital Partners completed its amend-and-extend deal to address its upcoming 2025 term loan maturity.
SI Group — The chemical additives company recentlyshared 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 companyhas 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.
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 covers Spirit’s historical financial performance and liquidity position and compares analysts’ forward estimates for Spirit with those of its peers.
Part 2 reviews the capital structure and debt covenants, and discusses the bankruptcy remoteness of the Loyalty Notes structure and the uncertain value of the Loyalty Notes collateral.
Part 3 examines options Spirit has to address the maturity of the Loyalty Notes, and how its creditors — including the noteholders with their famous 'triple-dip' — can position themselves for a positive outcome.
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 chainhas engagedGuggenheim 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.
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 providerkickstarted 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.
