$500m (+75m) sub cb coming tonight from CITI. Terms: 5yr, 5.25%-5.75% up 27.5-32.5% ppctns. UOP = CB hedge, repay debt, gcp. #rd biggest cement co in world. Great recovery play. Lost IG rating in 01/09 which led to $15.1B bank refi, asset sales, $1.75N s/debt deal & aggressive cost cutting. Aim= avoid b/debt interest increases […]
March 3, 2010 There are opportunities in busted converts that mature in 2011 that trade in the mid 90s. Many companies, particularly high yield companies, have been calling or tendering for their debt that is coming due within 2 years. Companies have been especially active retiring debt before they have to be classified as short term maturities […]
Distressed Debt Investors Website 03/01/10 Grant, a member of the Distressed Debt Investors Club and guest contributor here writes a piece on the advanced distressed investingconcept of intercreditor issues. Enjoy: A feature of the last credit cycle was the growth of 2nd lien financing. While structures involving bank debt, high yield bonds, and/or mezzanine loans also […]
Distressed Debt Investing Website 02/10/10 Grant, a member of the Distressed Debt Investors Club and guest contributor at Distressed Debt Investing writes an interesting piece on tax considerations in restructuring. Enjoy. Some Key Tax Issues in Restructuring Tax considerations can have a material impact on the value of a distressed business. The following contains a brief […]
Distressed Debt Investing Website 12/30/09 A friend asked me my opinion of something Whitney Tilson said in his most recent email regarding GGP. Here is the relevant text. “Hovde’s most serious mistake is misunderstanding (or misrepresenting) what will likely happen to GGP’s unsecured debt. Hovde assumes that it either remains outstanding (throughout its presentation, Hovde […]
Distressed Debt Investing 11/25/09 When investing in distressed debt, one has to be aware that negotiations can affect a creditor’s ultimate recovery – for the good or the bad. Why does this dynamic occur? More appropriately, what influences a creditor’s decision to negotiate in a bankruptcy proceeding? As noted quite often in this blog, the […]
Distressed Debt Investing Website: 10/26/09 The exclusivity period is the period after the bankruptcy petition date in which only the debtor can file its Chapter 11 plan. This is advantageous in that the company can work out its own version of how it sees fit in financing itself going forward – without creditors pressing for […]
June 2009 This was one of my best calls in distressed securities and it was actually a short. In early June, Lear stock traded at $2.50 even though there were signs that the company may file for bankruptcy. This was due to the hope that the US government’s cash for clunkers program would save the […]
$250m (37.5m) REG sen unsec tonight from JPM/MER. Terms: 3yr bullet, 7.75%-8.25% up 17.5-22.5% prot. UOP=pay down cp ($200m). $2.6B title, liability & mortgage insurer. Quality inv port but 1Q rev down in all businesses (mortage/titla = 1Q op losses) ’08 inv w/downs in MGIC/PMI but port now looking more stable w/conservative FI focus. Property/liability […]
$150m (22.5m) sen unsec cb coming from CS/MS. Terms: 5yr, 3.75%-4.25% up 20-25%, pctn. Brw-fac. UOP=gcp/acq. $1.5B med supply co (now sell higher margin diagnostic reagents rather than non-recurring equipment). Grow thru acq (used $115m cash FY08) w/more to come. LTM EBITDA and FCF = 76/62m resp. lev 3.9x co competes against BEC, Roche, J&Jetc […]