Global Credit Spotlight May 2023

Reorg delivers critical data and analysis for leveraged finance and restructuring professionals.

Here are some examples of coverage through the credit lifecycle from performing and primary markets to distressed, restructuring and post-reorg that you and your team could access through a subscription to Reorg.

Americas

In the Americas, 14 debtors filed for chapter 11 over the past two weeks, including six with liabilities in excess of $100 million. Bed Bath & Beyond entered the process on April 23, stating that “long shot transactions” failed to stabilize the company; the debtors now seek speedy store liquidations and potential 363 sales of other assets. Earnings season has kicked into high gear, with regional banks including First Republic a particular point of focus as the collapse of Silicon Valley Bank prompted a flow of deposits into larger institutions. The Federal Reserve meets next week, with most market participants expecting another rate increase of 25 bps despite a lower-than-expected first-quarter GDP print; nonfarm payrolls for April were released May 5.

Elevate Textiles

Elevate Textiles and sponsor Platinum Equity are negotiating with lenders to the textiles maker on a potential deal to be executed in a bankruptcy filing that would hand over substantially all reorganized equity to lenders in exchange for debt cancellation. Platinum Equity is expected to receive a small amount of new equity following restructuring, the sources said. Lenders are also expected to receive take-back paper. However, negotiations are ongoing and the parties may execute a restructuring out of court. >> Continue reading.

Securus Technologies

Securus Technologies disclosed last week that its majority owners committed $60 million of additional capital to support the business and that it is seeking a refinancing of its near-term debt maturities. The Dallas-based provider of telecom services to incarcerated people told investors that it expects to refinance its outstanding debt this year. Securus has an RCF due August 2024, a first lien term loan due November 2024 and a second lien term loan due 2025. >> Continue reading.

Europe

In Europe, the primary bond and loan markets resumed after the Easter break. A mixed bouquet of borrowers including hotel group Travelodge, chemicals producer CABB and a number of pharmaceutical-linked companies raised new debt to refinance, while frozen bread specialist Monbake locked in terms for a two-year amend-and-extend solution to its 2025 maturity. In restructuring, all eyes were on Justice Thomas Leech’s 164-page judgment in Adler’s contested English restructuring plan, which rejected a pari passu challenge to the company’s plan. The English High Court later ruled that the dissenting hedge funds cannot appeal the judgment.

Casino Guichard-Perrachon SA

A group of Casino’s €1.425 billion term loan B holders have mandated law firm Latham & Watkins as the retailer considers options to merge its French retail arm with Teract, sources told Reorg. While details on the merger remain limited, the transaction contemplates that two separate entities will be created. One will house all the retail activities of Casino and Teract in France (newco) and is expected to be listed and controlled by Casino. The other, named Teract Ferme France, would be in charge of supplying local agricultural products and controlled by InVivo. >> Continue reading.

UniCredit

Italian bank UniCredit said this week it will call its €1.25 billion 6.625% additional tier one notes at par, together with accrued and unpaid interest, on June 3. Investors had been buying into the discounted bond through April on the back of shivers stemming from Credit Suisse’s regulator led merger with UBS, which resulted in a $16 billion wipeout of Credit Suisse AT1 notes. >> Continue reading.

Asia

In Asia, Dalian Wanda focused attention on differing dynamics influencing onshore versus offshore China creditors through the lens of commercial bank loans as it seeks maturity extensions, while in India, eyes are again on perennial last-minute escape artist Vedanta, which managed to reduce its gross debt by about $1 billion in April but still faces a $500 million bond maturing in May. In Indonesia, Lippo Karawaci CEO John Riady has publicly expressed support for Lippo Malls Retail Investment Trust ahead of a widely anticipated liability management exercise. But the true nature and extent of that support from Lippo Karawaci – a 58.07% shareholder in Lippo Malls – remains to be seen.

Lippo Karawaci / Lippo Malls Indonesia Retail Trust

John Riady, CEO of Indonesian property and healthcare conglomerate PT Lippo Karawaci Tbk, or LPKR, said on an April 27 earnings call that the company continues to support Lippo Malls Retail Investment Trust, or LMIRT, “as much as we can.” But the nature and extent of that support from 58.07% shareholder LPKR remains an open question, as LMIRT heads toward a widely anticipated liability management exercise. >> Continue reading.

Sunac China Holdings

A group of dissenting creditors advised by Alvarez & Marsal and Latham & Watkins emerged to contest Chinese real estate developer Sunac’s announced restructuring proposal. The company’s advisors cautioned the action was value destructive and that the company reserved all rights and remedies. Meanwhile, A&M and Latham advised creditors on a conference call not to sign the company’s RSA and to demand that the company address specific material deficiencies in its proposal. >> Continue reading.

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