Leveraged Finance


Coverage of issuances, leveraged financing and recapitalizations across the US, EMEA and Asia from leveraged finance and legal experts. Our coverage includes news, data and analysis on leveraged loans, the leveraged loan and finance market as a whole, leveraged finance transactions and more.

European Leveraged Finance Trends – How Covenants Evolved in 2022
Fri Jan 27, 2023 3:46 pm Covenants Analysis  Leveraged Finance

Join Reorg’s senior legal analysts Brian Conway, Ian Chin and Bart Capeci on Wednesday, Feb. 8 as we discuss the latest trends in leveraged loan and high-yield bond covenants.

Our expert team will provide an overview of:

  • How the market for bond and loan covenants responded to the turbulence of 2022;
  • How investors pushed back on aggressive terms;
  • The outlook for 2023; and
  • How borrowers will use the terms of existing documentation to manage their liabilities.

Attendees can submit questions during the webinar or email them in advance HERE.

Details are below:

  • When: Wednesday, Feb. 8, at 2 p.m. GMT / 9 a.m. ET.
  • Registration: To register for the webinar, click HERE. Please register using your business email address.

See Reorg’s EMEA Covenants coverage.
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EMEA Middle Market 2022 Wrap

Reorg’s EMEA Middle Market team has published a Mid Market wrap that highlights debt capital markets, direct lending, debt and leverage data and more through 2022.

This year, disruptions in the debt capital market helped shine a brighter light on the expanding potential for private debt. Despite economic headwinds and uncertainty for M&A, direct lenders have sustained dealmaking, adapting and seizing opportunities such as large cap deals, public-to-private transactions, refinancings and add-ons.

“Direct lenders can provide higher visibility and certainty of execution without any caveats. Sponsors are now prioritizing such certainty over other elements that in the past were considered more important.” Leticia Ruenes, managing director and head of Spain at Pemberton, said.

Dry powder available for the asset class has increased 4% year over year amounting to $198.5 billion as of Wednesday, Dec. 14, according to research from Preqin. In 2023, market participants said they expect a slow start and an increase of activity from the second quarter mainly driven by leveraged buyouts.

Key Trends in 2022

One trend from 2022 is the amount of club deals that have arisen to satisfy the increasing average deal size, which is more than $1 billion for reported deals in 2022, according to Preqin. Rather than individual funds being sole underwriters, some sponsors are preferring optionality and a diversification of lenders because of the difficult economic climate.

In the first half of the year, various large direct lenders took a higher amount of debt financing deals and benefited from large cap borrowers’ inability to use a shut leveraged loan market due to macro uncertainties including the war in Ukraine.

In the second half of the year, club deals have allowed direct lenders to remain active, even as capacity declined due to heavy deployment at the start of the year and funds showed caution in a more challenging macro environment.

“Club deals are becoming more and more the norm in Europe and we have experienced this trend in our last recent transactions.” Luis Mayans, partner and deputy head, private debt for Europe at CDPQ, said. “There is an acceptance among lenders that club deals are the way forward.”

He cautioned that in a less certain market “some lenders, which would have done €500 million to €600 million deals six months ago, are now taking tickets a third of that size.”

A club deal structure isn’t yet a practice that all European funds are prepared to embrace. “Europe is about 10 years behind the U.S. in terms of club deals,” Stuart Hawkins, managing director in private credit at Ardian, said.

Access our EMEA Mid Market Debt Origination tracker, a monthly tracker capturing debt and leverage data from Reorg’s coverage, by requesting a trial.

To keep up to date on the EMEA credit market, subscribe to our weekly podcast and check our events page regularly for upcoming EMEA webinars.

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Year in Review — Americas Webinars 2022

Throughout the year, Reorg hosts webinars bringing together industry professionals to discuss themes in the performing, distressed, restructuring and post-reorg credit markets. Reorg’s webinars cover topical credits and industry updates. They’re produced by our reporters and analysts with selected external guests.

Americas Webinars from 2022:

  1. Primary in the Eye of the Storm: Challenges and Opportunities in Leveraged Finance in a Downturn
  2. Hot Topics in Crypto Winter
  3. Winter Came for Covid-Era Darlings? – Distress in Crypto and Tech
  4. Bausch’s Remedies for Potential Patent Defeat & Creditor Angst Over B+L Spin
  5. Puerto Rico’s Restructuring Endgame and Beyond
  6. Revlon – Chapter 11 Cases and Creditor Disputes
  7. CLO Considerations for Distressed Investors
  8. Diebold Nixdorf: Can Significant Unencumbered Assets Overcome Massive Maturity Wall?
  9. Talen Energy Chapter 11 Filing
  10. The Texas Two-Step: LTL J&J Chapter 11 and Likely Future Filings
  11. Samarco – Testing Brazil’s Bankruptcy Reform
  12. Loan Market Trends in 2021 from Americas Covenants
  13. No Surprises Act Rollout: Implementation and Litigation Challenges Ahead

If you would like to be panelist on our upcoming webinars, please contact marketing@reorg.com, and if you would like to be notified for the upcoming webinars, sign up for Reorg on the Record.

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Recent Reorg Podcasts
Fri Dec 23, 2022 4:48 pm Distressed Debt  High Yield Bonds  Leveraged Finance

Every week Reorg reporters and financial and legal analysts provide recaps, previews of what’s to come, interviews with experts and deep dives on topical credit situations. We focus on issues affecting and impacting distressed debt, leveraged finance, direct lending, high yield, municipals, covenants, private credit, and more.

You can listen to recent podcast episodes below, and follow Reorg on Apple Podcasts, Google Podcasts, SoundCloud or Spotify to access all past and future episodes.

Reorg Radio Americas: Avaya Inc., Clovis Oncology Inc., FTX, AIG Financial Products Corp.
Dec. 16, 2022. Listen here.

The Reorg Primary View: The Importance of Buying Assets and Cash Flows…
Dec. 12, 2022. Listen here.

Reorg Radio Americas: Endo International, AMC Entertainment Holdings, Reverse Mortgage Funding
Dec. 9, 2022. Listen here.

Reorg Radio Europe: Primary; Frigoglass Notes Restructuring Plan; Convene Restructuring Proposal
Dec. 6, 2022. Listen here.

The Reorg Primary View: Municipal Bond Markets
Nov. 21, 2022. Listen here.

Reorg Radio Americas: FTX Group, Alameda Research, Windstream, Hertz and analysis from Credit Cloud
Nov. 18, 2022. Listen here.

Reorg Radio Europe: Venator Q3 Results; Casino; EG Group; Emirates REIT Facing Dec. Maturity
Nov. 15, 2022. Listen here.

Conversations with Reorg: Willkie Farr & Gallagher Discuss A&E Transactions
Nov. 14, 2022. Listen here.

The Reorg Primary View: The Outlook for Venture Debt
Nov. 14, 2022. Listen here.

Reorg Radio Europe: Orpea Webinar; Corestate Restructuring Proposals; Reorg Event Highlights
Nov. 8, 2022. Listen here.

The Reorg Primary View: High Yield and Leveraged Loans Market
Nov. 7, 2022. Listen here.

The Reorg Primary View: High Yield Munis 2022 Review and Outlook for 2023
Nov. 4, 2022. Listen here.

Reorg Radio Europe: Ceconomy; Iceland; Metalcorp Developments; Matalan M&A; Primary Market Update
Oct. 25, 2022. Listen here.

Reorg Radio Americas: Talen, Endo, Carnival and Boardriders.
Oct. 21, 2022. Listen here.

Reorg Radio Europe: Matalan; Keter; Primary Market Update
Oct. 18, 2022. Listen here.

Reorg Radio Americas: Twitter, Bang Energy, Revlon and 3M
Oct. 14, 2022. Listen here.

Reorg Radio Europe: Atos Bonds Under Pressure; Metalcorp Meets Creditors; NSF, Morses Schemes
Oct. 11, 2022. Listen here.

Reorg Radio Americas: Twitter, Altera, Kabbage, Juul
Oct. 7, 2022. Listen here.

Reorg Radio Europe: Pizza Express Waterfall ; Matalan Recapitalization; Metalcorp Facing Default
Oct. 4, 2022. Listen here.

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Global Credit Highlights by Reorg

Reorg’s unique editorial approach combines legal and financial analysis with reporting for a holistic view on thousands of sub-investment grade credits from more than 100 countries.

Reorg’s editorial leadership has selected the following list of the most compelling and topical situations on distressed debt, restructuring, leveraged finance, and more across our global coverage universe. For any suggestions, please email us at questions@reorg.com.

In the Americas, markets ended the last week before Christmas in an unsettled state, with stocks falling and Treasury yields rising as market participants increasingly discounted the arrival of a recession in 2023 and the Federal Reserve’s aggressive rate hikes begin to take hold. Policymakers this week raised the fed funds rate by 50 bps compared with 75 bps at the previous four meetings; however, investors focused on the central bank’s “dot plot,” which indicated a terminal rate of 5.1% at the end of next year. The Fed’s action comes even as consumer prices have eased lower in each of the past two months; even so, companies in earnings reports are increasingly highlighting the effect of cost and labor inflation on financial results, as well as a growing tendency by consumers to reel in spending in the face of higher prices.

Highlights from Reorg’s Americas Core Credit team:

AMC Entertainment

AMC Entertainment Holdings Inc. lenders have organized again as the movie theater chain continues to burn a significant amount of cash and its liquidity runway comes into question. The company burned $278 million of cash in the third quarter, bringing its year-to-date free cash burn to $725 million. Reorg estimates pro forma liquidity of $767 million as of Sept. 30, down $1 billion from $1.8 billion at the beginning of the year. AMC’s LTM adjusted EBITDA through Sept. 30 of $191 million is only 25% of 2019 levels. Even if this number improves materially, AMC could still burn cash in 2023 unless box office performance exceeds expectations. Reorg’s AMC coverage.

Revlon

Revlon is in discussions with creditors to issue new reorganized common shares and warrants, whose terms must be acceptable to BrandCo lenders, to exit its bankruptcy proceedings. No strong bids have emerged – hence a sale is not a likely path for the cosmetics retailer to emerge from chapter 11, at least from where things stand now. The company is also working on a global settlement to resolve intercreditor issues. Access Reorg’s Revlon coverage.

Party City

Party City is exploring options to boost liquidity, including upsizing its first-in, last-out facility, as the party supplies store chain burns cash because of stubbornly high helium, freight and labor costs. Certain holders of Party City’s first lien notes, including Silver Point Capital and Capital Group, have organized with Davis Polk as counsel and Lazard as financial advisor. The company has received inbounds from investors that are interested in providing financing in the form of FILO. Party City is permitted to upsize its existing ABL or FILO by $200 million under the existing credit agreement, according to Americas Covenants by Reorg. Following an amendment to the ABL agreement in July, the company had $17.1 million outstanding on the FILO tranche. Reorg’s Party City coverage.


In Europe, the leveraged loan market sprung back to life with banks offloading high-yield debt with lumpy OIDs in companies that had previously pulled issuances. Short-seller Muddy Waters launched a campaign against German real estate group Vivion questioning some of its shareholder loans and challenging its reported occupancy rates. The company responded that the report is inaccurate and flawed but that did not stop the bonds from losing 10 points to yield almost 20%.

Highlights from Reorg’s EMEA Core Credit team:

Vivion

The United Kingdom-and-Germany-focused real estate group Vivion’s bonds dropped more than 10 points this week after hedge fund Muddy Waters announced a short position in the debt and released a research report focusing on doubts over some shareholder loans, the reported occupancy rates in Germany and a potential inflation of the value of the U.K. hotel portfolio. The company rejects the allegations as inaccurate. Access Reorg’s coverage of Vivion.

DOF ASA

DOF ASA’s three-year debt restructuring process took another turn this week when shareholders in the Norwegian offshore service company voted to sack the company’s long-time board of directors and install a new team of candidates pitched by two activist shareholders opposing the company’s restructuring plan. The new chairman told Reorg that DOF will continue to pursue its in-court reconstruction plan but added that the new directors will form their own view on how to proceed. The consortium of lenders and bondholders backing the debt-for-equity swap plan immediately sent a letter reminding the company of its agreement to implement the terms agreed in June. Access Reorg’s coverage of DOF.

Veon

Global telecoms group Veon has added a number of sweeteners to its proposed English scheme of arrangement after receiving feedback from certain investors holding its $529.3 million 5.95% notes due February 2023 and $700 million 7.25% notes due April 2023 that are being extended by eight months. Veon will enhance the proposed maturity extension with an increased amendment fee of 200 bps, up from 75 bps under the Nov. 24 proposal, payable on the maturity dates of the new 2023 notes. Veon is also offering creditors a put right, requiring Veon to buy back up to $600 million of the $1.229 billion of outstanding bond principal at 101. Access Reorg’s coverage of Veon.


Over in China, the nation is headed for another Covid-19-ravaged winter, this time after China largely lifted quarantine requirements and travel restrictions in part in response to public protests. iQIYI, China’s answer to YouTube and Netflix combined, has engaged Kirkland & Ellis and Houlihan Lokey as legal and financial advisors, respectively, to explore financial options.

Highlights from Reorg’s Asia Core Credit team:

iQIYI

This Chinese online video platform has engaged Kirkland & Ellis and Houlihan Lokey as legal and financial advisors, respectively, to explore financial options. Access Reorg’s coverage of iQIYI.

Yuhua Education

Linklaters, financial advisor to an ad hoc group of holders of Yuhua’s HKD 2.088 billion 0.9% convertible bonds due 2024, said in a statement that the ad hoc group has exercised their rights to require early redemption of the outstanding convertible bonds on Dec. 27. The group also detailed progress and terms agreed to so far during restructuring negotiations with the company. Reorg’s coverage of Yuhua Education.

New Coverage: Goodpack

Reorg on Dec. 9 initiated coverage on Singapore-headquartered container-maker Goodpack. The KKR-backed company is close to finalizing a fully committed refinancing of its U.S. term loan B debt through an Asian bank club and a fully subordinated mezzanine piece, according to sources. Reorg’s coverage of Goodpack.

To read more intelligence articles, breaking news alerts and in-depth analyses on companies across the Americas, Asia and EMEA regions, click here.

Access all of Reorg’s coverage on thousands of distressed, stressed and performing credits: request a trial.

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China’s Regulatory Stimulus, Impact on Real Estate Sector

Since the second week of November, the Chinese government has released a slew of new policies and initiatives aimed at expanding access to financing for privately held real estate developers. Policy highlights include the so-called Second Arrow program to provide up to RMB 250 billion total financing and 16 measures from the central bank and the China Banking and Insurance Regulatory Commission for supporting real estate companies. Asia’s high-yield market rallied following the unveiling of the policies, with China real estate bonds leading the rise.

Will the new policies end China’s real estate crisis? How much will they help lift the industry out of its recession? Could this be the turning point people were hoping for? And how long will the exuberance last? In this webinar, Reorg’s China editorial team will share their take on the situation.

Panelists:

  • Katherine Shi, Reorg China Editor
  • Anna Zhang, Reorg Senior Reporter
  • Shasha Dai, Reorg Managing Editor, China (Moderator)

Webinar details:

When: Tuesday, Dec. 13, 5 p.m. HKT / 9 a.m. GMT
Registration: To register for the webinar, click here.

The Asia Pacific Loan Market Association (APLMA) is a supporting organization for this webinar.

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Reorg Panel Event London – Navigating the Perfect Storm
Fri Nov 11, 2022 3:06 pm Distressed Debt  High Yield Bonds  Leveraged Finance

Reorg was delighted to bring leveraged finance and restructuring professionals together again in London at Claridge’s on November 3.

Mario Oliviero welcomed guests before an exciting leveraged finance panel.


Beatrice Mavroleon moderated an expert panel ‘Double-Digit Yields – Is Primary the New Distressed?’, including Tim Ayles from Rothschild & Co, Touboul Marc from Bain Capital, Robbie Harris from HSBC, and Jerome Ingenhoff from Alcentra.

Primary markets remain shut for all but tried and tested repeat issuers, and that is unlikely to change anytime soon, the panelists agreed. It will take time for the market to fully stabilize, and for banks to start underwriting debt again under new conditions, which means it will be at least the first or second quarter of 2023 before we start to see more deal flow. However, there was a constructive window in June and July, when a couple of CLOs priced, and there has been some stabilization over the last two weeks, with several more CLOs printing.

— Panelists, Double-Digit Yields – Is Primary the New Distressed

Reorg’s Magnus Scherman moderated our second live panel ‘The Distressed Landscape – Who Goes First and How?’
Our panelists for this session were Ralf Ackermann from Searchlight Capital Partners, Lois Deasey from Weil, Gotshal & Manges LLP and Gijs de Reuver from Houlihan Lokey for an engaging discussion. Reorg subscribers can read a full overview here.

We had an excellent attendance. Thank you to everybody who registered and joined us on the day.

For more information about upcoming events and webinars, click here.

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Reorg’s Recent EMEA Webinar Replays

Throughout the year, Reorg hosts webinars bringing together industry professionals to discuss themes in the performing, distressed, restructuring and post-reorg credit markets. View a selection from our EMEA Core Credit team here.

Houst RP Binds Dissenting HMRC – Where Next for SME Restructuring Plans?

Reorg’s Shan Qureshi hosted a webinar covering the first use of the Part 26A Restructuring Plan in the SME market by Houst Ltd. with the advisors on the deal.

The panel discussed “cross-class cramdown” with respect to the U.K. tax authority and explored the interaction between the allocation of a “restructuring surplus” and the “relevant alternative” order of priorities.

Our group of experts also discussed how the English court is becoming pragmatic when it comes to SMEs using the restructuring plan and where we may see more creative deals in the future.

View the recording here.


European Primary Update – What to Expect When the Market Reopens.

The European leveraged finance market enjoyed a blistering start to the year, notching up record issuance levels, fueled by healthy inflows and the market putting on reopening trades.

While market participants expect the torrent of new issues to resume post the August break, a number of potential headwinds loom, such as the tapering of central banks’ asset purchases amid rising inflation, major supply chain disruptions which are increasingly disrupting certain industries as well as the potential risk of winter lockdowns if Covid-19 rates spike again.

In this webinar, Reorg along with high-yield bond and loan investors, looked at the outlook for the European primary leveraged finance markets in the second half, discussing these potential risks, some of the key trends in primary markets and how they expect the rest of the year to shape up
View the recording here.


National Interest Insolvencies – Should these be for the State to Manage?

Over the last few years there have been four large national interest insolvency cases which have gone into compulsory liquidation with The Official Receiver and special managers appointed. In this webinar, our panelists – from Ashurst, EY and The Insolvency Service – discussed if compulsory liquidation is fit for purpose for these big complicated, national interest insolvencies. We also examined the factors pushing these cases into public sector insolvencies rather than private administration.

View the recording here.

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Reorg Upcoming Events: Leveraged Finance, Restructuring, LegalTech and More…
Tue Oct 25, 2022 1:21 pm Leveraged Finance

Throughout the year, Reorg hosts and participates in events and conferences bringing together industry professionals to discuss themes in leveraged finance and the performing, distressed, restructuring and post-reorg credit markets. Here’s a recap of our upcoming events:

Webinar: Hot Topics In Crypto Winter – November 2, 2022 at 12 pm ET

Join our expert panel for an overview of the state of the crypto industry and the trajectory of the ongoing reorganizations of cryptocurrency exchanges Voyager Digital and Celsius Network. The panel will also discuss legal issues relating to the valuation and ownership of cryptocurrency assets, and what’s next in crypto restructurings and regulation. Register here.

In-person Panel Event: Navigating the Perfect Storm – November 3, 2022
Reorg moderates two expert panels on leveraged finance and restructuring followed by drinks and canapes. Including experts from Rothschild & Co., Houlihan Lokey, Weil Gotshal, Searchlight Capital and HSBC.

IWIRC London Annual Conference in collaboration with Reorg – November 10, 2022
The kick-off panel ‘The restructuring landscape’ is a commercial session covering market trends and topical issues will be moderated by Reorg’s Julie Miecamp.

Reorg Product Showcase Webinar: Exploring Credit Cloud – November 10, 2022 at 12 pm ET

Jon Wright, SVP, Product, Strategy & Innovation and Stephanie Freedman, Credit Cloud Product Specialist show how Credit Cloud is used by our legal, advisory, and investment management customers to drive meaningful outcomes. Register here.


If you’re interested in reading our coverage of leveraged loans, the leveraged loan and finance market as a whole, leveraged finance transactions and more, click through and read the leveraged finance section of our blog and to become a Reorg subscriber request a trial.

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EMEA Middle Market Industry Update: Private Debt Funds Fill Gap Left By Leveraged Loans
Fri Oct 21, 2022 2:39 pm Leveraged Finance

Private debt funds have been buying secondary loans, offering bifurcated debt packages, including PIKs and preferred equity to continue to deploy capital in volatile markets. While in the first half of the year, private debt funds filled in the gap left by leveraged loan and high yield bond investors to support buyouts, investors are now considering secondary market relative value, adapting deal structure and becoming pickier on sectors.

As the M&A pipeline has been hit by an increasing gap in companies valuation due to the prospect of recession and inflation, direct lenders have focused their efforts on tailored opportunities.

If you are interested in reading more coverage of issuances, leveraged financing and recapitalizations across the US, EMEA and Asia from leveraged finance and legal experts, please click through to read the leveraged finance section of the Reorg blog. Our coverage includes news, data and analysis on leveraged loans, the leveraged loan and finance market as a whole, leveraged finance transactions and more. Request a trial.

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