Reorg on the Record: Entering 2023 after a tumultuous year
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Credit market participants enter 2023 after a tumultuous year that saw junk bond yields increase to almost 9% as the market continues adjusting to a higher rate environment.
Reorg has invested in tools that will enable clients to analyze performing and distressed markets. OurCLO data set provides access to CLO information from almost 200 managers, which clients can use to screen for lending opportunities.
For the cinema industry, drama is building off-screen, with London-based cinema operator Cineworld saying on Tuesday, Jan. 3, that neither the company nor its advisors have participated in discussions with AMC Entertainment regarding the sale of any of AMC’s cinema assets. The disclosure followed a Dec. 21 release from operator AMC that it discussed with Cineworld lenders a potential strategic acquisition of AMC through Cineworld’s chapter 11.
Puerto Rico Electric Power Authority remains under a debt restructuring process in the Title III court. The PROMESA oversight board filed a proposed plan of adjustment for PREPA in mid December of 2022, which is tracking for a disclosure statement hearing in late February and a confirmation hearing in July.
Our Americas teams are working tirelessly to bring subscribers the most in-depth data, analysis and reporting on more than 3,000 performing and distressed credits. A glimpse into our offering is shown below:
At a hearing Wednesday, Dec. 28, Judge Michael Kaplan declined to postpone the Monday, Jan. 9, hearing on the BlockFi debtors’ turnover motion in their adversary proceeding against Emergent Fidelity Technologies Ltd. and ED&F Man Capital Markets Inc., or EDFM (nka Marex Capital Markets). However, the court approved a consensual extension of the defendants’ deadline to answer the underlying adversary complaint and a corresponding continuance of a Feb. 2 pretrial conference to dates to be agreed by the parties. » Continue Reading
On Thursday, Dec. 29, 13 banks and 10 “John Doe” entities that served as underwriters for Puerto Rico municipal bonds or interest rate swaps moved to dismiss commonwealth avoidance action trustee Drivetrain LLC’s action to claw back various payments on the bonds, which Drivetrain asserts were illegally issued. The defendants argue that Drivetrain’s complaint should be dismissed because all of the challenged transfers were ordinary-course transactions made under valid and enforceable agreements.» Continue Reading
The Twin Cities German Immersion School, a charter school in St. Paul, Minn., which is the obligor of $15.13 million in lease revenue bonds, posted its debt service coverage covenant certification for the 2022 fiscal year. The school had a debt service coverage ratio, or DSCR, of 0.92x, falling below its covenant requirement, though the school did meet its liquidity covenant. According to an end-of-year disclosure call, failure to meet the covenant was unexpected, as the school had budgeted a 1.01x DSCR and did not anticipate missing it when it was doing monthly reviews during the fiscal year. » Continue Reading
Judge Marvin Isgur granted the Cineworld Group debtors’ emergency motion to exercise certain equity redemption rights in National CineMedia LLC, or NCM LLC, at a hearing this morning after resolving a limited objection by NCM LLC and its publicly traded parent NCM Inc. According to the debtors’ motion, the request arises in light of NCM LLC’s “burdensome debt load” and the potential that it will restructure in the near-term, resulting in cancellation of debt income that might flow up to Cineworld, as debtors Regal CineMedia Holdings LLC and Regal Cinemas Inc. own 23.7% of NCM LLC, an operating partnership in an “Up-C” structure. » Continue Reading
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Is Asia’s credit market permanently broken? “Three red lines,” multiple defaults, frozen escrow accounts, follow-on liability management exercises and opaque onshore restructuring processes are just some of the factors that have hit or continue to affect the high-yield market, and have contributed to massive losses in Asian high-yield markets. What will stem fund outflows from the region? Will high-yield bond markets ever return to their previous size? What will markets look like in the year ahead? In 2024 or 2025?
Amid a backdrop of slowing economic growth exacerbated by Covid-19 lockdowns and still-slow contracted sales, join Reorg — along with a panel of expert guests from Rothschild & Co., Latham & Watkins and Dechert –– for a discussion of what we can expect this coming year in the Asian credit markets. » Register now.
Each episode of Reorg’s weekly Americas Core Credit podcast series features detailed discussion on issues and companies across the credit lifecycle. In the last podcast of 2022, the team discussed AIG Financial Products Corp., FTX, Avaya and Clovis Oncology. » Listen now.