Also, advisors to creditors of Ardagh Group remain in confidential talks with the packaging company on ways to lock down unencumbered collateral or do something before more deals like the one struck with Apollo take place that will strip assets and/or prime the existing secured creditors.

This has added to the list including lenders to Magenta Buyer, Mobileum, Astound (RCN/Radiate Holdco) and Hearthside who have all been in confidential negotiations started in the second or third quarter – while there has even been some controversy stirred up the negotiations when these things haven’t worked out, like negotiations between Veritas and its lenders (like Magenta, Veritas advisors have found themselves across the table with Elliott Management as a large lender).

With more and more co-ops and lender organizations, especially with a number of large public companies, these private negotiations can take up significant time with no agreement, or with multiple rounds of restricted parties and then having to publish cleansing materials to the market (which has been an argument for perhaps more “naked” launches so that a company doesn’t find itself negotiating against itself by disclosing concessions in private negotiations that went nowhere). Either way, stay tuned to 9fin for the details on a number of LME proposals or agreements soon.

The Default Notice is produced by 9fin’s distressed and restructuring team: Max Frumes | max.frumes@9fin.com, Rachel Butt | rachel@9fin.com, Teri Buhl | teri.buhl@9fin.com , Max Reyes | max.reyes@9fin.com, Kartikeya Dar | kartik@9fin.com, Cat Corey | cat@9fin.com, and Jane Komsky | jane.komsky@9fin.com

Recent news

Incora — Judge Marvin Isgur ruled that the aerospace parts supplier’s disputed March 2022 transaction breached certain bond indentures, dealing a blow to Platinum Equity and other creditors who participated in that deal. Here’s a look at what the ruling could mean for future LMEs, and here’s a transcript with Judge Isgur’s oral decision.

Purdue Pharma — Purdue Pharma and its creditors will move forward with 60-day mediation to try to come up with a settlement that would satisfy the Supreme Court’s ruling. If a settlement cannot be reached, the UCC in the case will pursue litigation against the Sackler family that the UCC estimates is worth approximately $11.5bn.

Steward Health Care — 9fin examines the different bearish scenarios potential bidders who have until 15 July to place a bid are weighing, as well as the lease recharacterization issue that is a key subject of the mediation between the debtors and their creditors. Also, after UnitedHealth’s Optum withdrew its bid for the Stewardship Health physician network because of a DOJ investigation into Steward, court filings made by the physician-owned healthcare provider fueled further controversy as they revealed that it had paid $1.6m to a private intelligence firm.

Altice USA — The three-year cooperation agreement, which a group of creditors advised by Akin Gump and PJT Partners was earlier close to signing, is set to become effective after it reached the 60% minimum threshold of support.

Franchise Group — The B. Riley-backed franchise owner and operator has hired Ducera Partners while its lenders have engaged Paul Hastings, following weak earnings and news of Conn’s — in which it holds a large chunk of equity after it sold a business to Conn’s in 2023 — considering bankruptcy.

iHeartMedia — The steering committee of the Pimco-led ad hoc group advised by Davis Polk and Perella Weinberg has gotten restricted to engage in negotiations with the company.

Del Monte Foods — The company is in talks with existing lenders about a potential new money injection after efforts to raise secured debt from third parties failed.

Chicken Soup for the Soul — Chicken Soup filed for Chapter 11 protection and reached an agreement with prepetition agent HPS Investment Partners for a DIP, but its case was converted to Chapter 7 after its lenders indicated that they would not be willing to fund any additional post-petition financing following shocking allegations of mismanagement at the debtor companies.

Enviva — Vinson & Elkins’ second attempt to be employed as Enviva’s debtors’ counsel also failed. Judge Brian Kenney of EDVA remained uninterested in V&E’s many proposed solutions to render the firm “disinterested”.

Invitae — After hearing arguments earlier in the week on the UCC’s standing motion for litigation related to uptiers, and today arguments over makewholes, Judge Michael Kaplan decided to issue a preliminary ruling denying the standing motion and reserved his ruling on the makewhole issue.

Red Lobster — Red Lobster announced a potential pivot to a Chapter 11 reorganization instead of a 363 sale, with the intent to exit bankruptcy by August-end. This plan of action has the support of prepetition lenders and the UCC, with which it recently reached a global settlement.

Fisker — The sale hearing in electric vehicle manufacturer’s Chapter 11 case was pushed by five days to 16 July, giving the recently constituted UCC time to investigate and for parties to negotiate a resolution, and for the company to engage with a counterparty party other than American Lease on the sale. The UCC claims that primary secured creditor Heights Capital “materially profited” from its investment in Fisker and its liens are “questionable at best”. Chapter 7 still remains a possibility.

Dynata — The Chapter 11 plan for the data platform company was confirmed on an uncontested basis and without a hearing. Dynata is set to eliminate 40% of its $1.3bn of debt, with first and second lien lenders to own the company, and receive $50m in exit financing.

CareMax — The value-based healthcare provider paid lenders a 3% PIK fee to execute an eighth amendment to its credit agreement, which provides for $20m in incremental term loan facilities and extend waivers through 15 August 2024. The loans mature on the earlier of 10 April 2025 and the occurrence of “certain liquidity events”, bear interest at SOFR + 13%, require that the lenders receive a 1.3x MOIC on repayment and impose many restrictive provisions. CareMax had recently disclosed  that it had appointed Paul Rundell from Alvarez & Marsal as CRO. 

SunPower — The struggling residential solar power company saw its stock plummet as its auditor EY resigned (and responded to the 8-K announcing the resignation) and details of financial misconduct allegations against senior management and the SEC’s examination of its revenue recognition practices were revealed.

Allen Media — Certain first lien lenders to the media company were reported to have organized with Gibson Dunn and signed a cooperation agreement. 9fin had earlier reported that Allen Media had designated several subsidiaries — holding equipment that is claimed by the company to have zero market value — as unrestricted.

Tupperware — Tupperware disclosed the extension of its forbearance agreement with its lenders to 14 July and announced the departure of its CFO.

Cano Health — The healthcare services provider emerged from bankruptcy having shed over $1bn of prepetition debt. Prepetition first lien lenders have taken control and the company has in place senior secured exit facilities in the form of a $50m first out delayed draw term loan and a $161.25m second out takeback term loan. Cano had filed for bankruptcy in February.

Hornblower — The ferry operator announced its emergence from bankruptcy, with Strategic Value Partners acquiring majority ownership, prior sponsor Crestview Partners retaining a minority position, and the company shedding $720m (over 70%) of prepetition debt. The company had filed for bankruptcy in February.

Fossil Group — Following quarters of dismal results and with an operational restructuring ongoing, Fossil announced the resignation of its CFO and the appointment of Andy Skobe of Ankura to provide interim CFO services.

Other active distressed and restructuring coverage

Alkegen — Formerly known as Unifrax, lenders to the specialty materials maker formed a coop as the company vetted financing proposals from third party investors.

Altice France — The telecom company has revealed its first highly anticipated move, disclosing designations of five more subsidiaries as unrestricted as well as moving its HoldCo RCF down to OpCo level. 9fin’s deep-dive report explores the range of eventualities that are blown open by creditors’ diverging incentives, Patrick Drahi’s huge capacity to strip value away from creditors, French law considerations and the intricacies of timings, triggers and creditor group make-ups.

American Rock Salt — The salt company hired legal counsel to address elevated leverage and volatile demand, according to sources.

Anthology — Nearly 100% of the first lien loans of the Veritas-backed ed-tech company are said to have agreed to exchange under a liability management deal that 9fin had reported was launched after negotiations with an ad hoc group of first lien lenders. The deal also extends the company’s revolver to early-2028.

Ardagh Group — Advisors to certain senior creditors have started confidential talks with the metal and glass packaging conglomerate on ways to address an upcoming debt wall. A large swathe of crossholders have also signed a coop agreement to bind their acts together in potential negotiations.

Astound Broadband — A group of lenders 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.

Belk — The retailer is closing in on a deal to raise $500m to help address its debt maturities and pad liquidity. Existing debtholder KKR and new investor Sixth Street Partners are among funds providing new money.

Carestream Dental — The company reportedly began confidential talks with lenders to raise capital. 9fin had earlier reported that CD&R and CareCapital Advisors-backed company has been working with Jefferies to address its revolver and term loan maturities this year.

CommScope — The company reported Q1 24 results, with continuing declines across segments and significant cash burn, though the CCS and OWN segments have shown signs of recovery. Management noted that CommScope was continuing to evaluate all alternatives, including using flexibilities in credit documents (9fin analyses here), to address debt maturities.

Cox Media Group — Certain holders of Cox Media Group’s term loan and bonds organized driven by concerns around the Apollo-backed TV broadcasting and radio company issuing dividends when the business is struggling and facing a high debt burden.

EchoStar/DISH — Bondholders to the EchoStar subsidiary Hughes Satellite Systems are reported to have engaged Glenn Agre to explore remedies for value leakage in the form of a recently disclosed lease agreement for a satellite. The agreement requires Hughes to pay $15.9m monthly to EchoStar, and Hughes has also made a $100m prepayment under the lease.

Emergent BioSolutions — Holders of Emergent’s 3.875% SUNs due 2028 stand to receive a high potential recovery amid a stabilization of earnings, per 9fin analysis, as our illustrative waterfall outlines a scenario-based recovery of between 92% and 93% with the bonds quoted near 60 cents.

Express — Express received permission to move forward with its sale process, and rapidly concluded the process, announcing that Phoenix Retail — a JV owned by WHP Global (majority owner of the entity holding Express’ IP), Simon Property Group, Brookfield Properties and Centennial Real Estate — emerged as the winning bidder for substantially all its assets.

EyeCare Partners — The vision care network completed its 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.

FreshDirect — The grocery delivery company is set to get some rescue financing from its parent company, Getir, to help support its operational needs.

Gol Airlines — 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. In recent days the UCC has objected to the debtors attempts to allow aircraft lessors to sell a participation interest in their unsecured claims, while retaining their voting rights on any potential Chapter 11 plan.

Gray Television — The broadcaster announced a $250m debt repurchase plan along with Q1 24 earnings that showcased a year-on-year improvement, sending prices of its debt and shares higher.

Hearthside Food Solutions — Certain creditors have started confidential negotiations with the company, as the company faces roughly $2bn of term loan maturities in 2025 and $350m in unsecured bonds due 2026.

Hertz — The troubled rental car company priced $750m of 12.625% first lien notes due 2029 and $250m of 8% exchangeable second lien PIK notes due 2029. Proceeds will be used to pay down its revolver and improve liquidity. See 9fin’s QuickTake on the $750m issuance here.

Magenta Buyer/McAfee — A lender group has become restricted to engage in confidential negotiations with the company, shortly after it held discussions with creditor Elliott for new money.

Mobileum — Certain lenders to the HIG-backed telecom software and analytics company have started confidential negotiations with the company, which missed a coupon payment on its first lien loan and faced financial reporting issues. Mobileum is also in the midst of a dispute between HIG and former sponsor (and current minority investor) Audax, with HIG blaming Audax and former management of fraud and misstatement of financials and Audax countersuing.

Mold-Rite — 9fin reported the terms of MRP’s deal with its lenders to swap its debt into new debt spread across four tranches, as well as to raise $113m of new money. The deal will “drastically improve” things for the Clearlake Capital-backed company. Further details are available in this S&P note.

Office Properties Income Trust — The publicly-traded REIT announced the final results of its exchange offers, with $865m of its senior unsecured notes due 2025 to 2031 set to exchange into $567m of new 9% senior secured notes due 2029. Though OPI captured around $298m of discount, it will have almost $500m of the 2025s to address in the coming months.

Petrofac — The energy services company has defaulted on its senior secured notes after failing to convince lenders to extend the grace period on a missed interest payment.

Pluralsight — 9fin reported on how the company is in talks with its sponsor Vista Equity and lenders on ways to overhaul its debt, according to sources.

Rite Aid — Rite Aid notched a win when the judge overseeing the case ruled in favor of Rite Aid on a working capital dispute in the Elixir APA — an approximately $200m dispute, and then agreed to confirm the Chapter 11 plan. Rite Aid also received approval to sell $435m of a term loan issued by Elixir structured as a seller note held by Rite Aid. However, all is not resolved — MedImpact, Elixir’s purchaser, has appealed the Elixir ruling, and others have appealed confirmation.

Robertshaw — Judge Lopez found that the One Rock-sponsored company violated its credit agreement when implementing an LME in December — engineered with the support of Bain Capital, Canyon Partners and Eaton Vance, but confirmed that the participating lenders remained “required lenders” under the credit agreement. Invesco, the contesting lender, is only entitled to assert monetary damages and not equitable remedies, per the judgment. Invesco has since appealed the judgment, while Judge Lopez has approved Robertshaw’s sale to the participating lender group.

Rubio’s Restaurants — Rubio’s filed Chapter 11 bankruptcy filing in order to sell itself.

Salem Media — Certain debtholders have banded together with Paul Hastings to negotiate a possible debt restructuring with the conservative Christian media company.

SI Group — The chemical additives company 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 was downgraded by S&P from B- to CCC. The S&P note states that on 25 April, SIRVA’s first and second-lien credit agreements were “modified to pledge more equity from subsidiaries as collateral to lenders, to 100% from 65%, which we view as lenders' concerns over the company's performance and ability to manage its obligations in a difficult operating environment.” This comes after it raised a new money priming loan (per S&P a $84m delayed-draw term loan) in order to bridge the company to a broader debt restructuring.

Spirit Airlines —  The troubled ultra low-cost airline delayed a recently-scheduled analyst day, which could suggest the execution of its standalone plan and creditor negotiations are not on track. Read our three-part series on the stressed ultra low-cost airline and its Loyalty Notes: Part 1, Part 2 and Part 3.

STG Logistics — 9fin reported that STG lenders signed a cooperation agreement, which would bind them together in potential negotiations with the company.

Sunnova Energy — The residential and commercial solar company has hired AlixPartners to help boost liquidity and Moelis to explore restructuring options. Earlier, it has agreed on several funding deals, including a new tax equity agreement with JP Morgan and a lease securitization deal with owners of home security firm Brinks Home, and more recently a DoE-guaranteed loan.

Telesat Canada — The Canadian satellite company posted expected declines in revenue, EBITDA and margins in Q1 24, and reaffirmed guidance for the full year. Backlog and cash generation for the legacy business declined as Telesat continues to lose GEO customers and focuses on Lightspeed. Certain creditors are reported to have hired Evercore and Lincoln International for advice. 9fin earlier provided a comprehensive analysis of the company’s disappointing FY 23 earnings and FY 24 guidance.

The Container Store — Certain lenders are getting legal advice from Paul Hastings, as the retailer faces a term loan maturity in 2026 and an uncertain earnings trajectory.

2U — The education tech company has started confidential negotiations with creditors on ways to overhaul its debt. Once a high-flying online education startup, 2U is facing an upcoming debt wall and heightened regulatory scrutiny of its revenue-sharing business model.

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

Thrive Pet Care — The company hired Evercore to examine options for its debt stack, 9fin reported. Meanwhile, a group of first lien lenders is seeking advice from Akin Gump as they brace for potential negotiations with the TSG Consumer Partners-backed company, sources said.

United Site Services — The portable toilet rental company is set to tap a $115m commitment from sponsor Platinum Equity as it 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”.

Wellpath — The HIG-backed prison healthcare company is working with Lazard to explore options ahead of a revolver maturing and a first lien term loan becoming current in October. A group of lenders is said to have tapped Akin Gump and have taken pitches from bankers, with Houlihan Lokey in the pole position.

WOM — WOM avoided a two-day trial on a motion to dismiss filed by an ad hoc group of unsecured noteholders and brokered global peace in the case. With the motion to dismiss out of the way, the company was able to receive final DIP approval and move forward with a marketing process.

Workhorse — The electric vehicle company continues to raise capital through the issuance of convertible notes and warrants and employ cost-cutting measures to address cash flow pressures. 9fin had earlier reported that the company is working with Stifel to help raise bridge financing.

WorldStrides — Lenders to the student trip company have retained Ducera Partners in order to develop potential alternatives to the recently expired discounted exchange offer.

Xplore — The Canadian rural internet provider announced an agreement to raise new debt and equity financing, with sponsor Stonepeak and certain existing lenders leading the investment and other lenders to get the opportunity to participate on substantially similar terms. Xplore has commenced a proceeding under the Canada Business Corporations Act to implement the deal.

Veritas Technologies — Elliott Management has emerged as one of the largest creditors to the company and is butting heads with the company on its liability management options, according to the FT. 9fin had previously reported that a group of creditors has begun confidential talks with the Carlyle-backed data management firm on ways to address its debt due 2025.

Vyaire Medical — Vyaire, a breathing technology company, commenced Chapter 11 after post-pandemic macroeconomic challenges led to a liquidity crisis. Backed by an RSA with a first lien ad hoc group, the company intends to continue to pursue a prepetition marketing process. The company also received interim approval of its $180m DIP facility at its first-day hearing.

Zachry Group — The family-owned EPC company received routine court approvals at the second day hearing in its Chapter 11 case. Employees have filed a WARN Act complaint claiming Zachry failed to provide the requisite 60 days’ notice before laying off around 4,100 workers.

Zayo — 9fin broke the news that Zayo is working with banks to help gauge investor interest in raising new debt at its recently carved out Europe subsidiary.

Weekly declines

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

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