Fall chill blows through Toys, Windstream, Del Monte, Algeco cap structures – Greatest Hits

11 September 2017
The restructuring pipeline is poised to spillover this coming Fall season on account of several companies nearing their respective bursting points.
 
Toys R Us erupted in volatility at the start of September. Debtwire had the scoop on management and company advisors circulating rescue and/or DIP financing proposals to restricted funds. Meanwhile, Taj bondholders have mobilized as global game theories are running wild.
 
Another retailer under duress is Charlotte RusseDebtwire broke the story on lenders bolstering their mobilization effort in anticipation of a workout.
 
Debtwire also had the exclusive on grocery chain Bi-Lo kicking off workout talks with bondholders to address 2018-2019 maturities. The negotiations are taking place following an EBITDA slide in 2Q.
 
The situation at PaperWorks is also getting exceptionally dicey. Debtwire recently had the exclusive on the borrower hiring advisors after 2Q17 earnings underwhelmed.
 
Following Debtwire's scoop last month on EXCO retaining workout counsel and advisors, the company on 7 September publicly confirmed the hires and announced it's exploring a strategic review.
 
In a cross border showdown, Algeco Scotsman bondholders sent a letter to the company’s board of directors expressing concerns over the “self-dealing” nature of the company’s transaction to sell its William Scotsman unit to an entity minority-owned by Algeco sponsor TDR Capital. Debtwire's exclusive on the letter hit the tape a day after reporting that bondholders were scrutinizing the company's transaction history.
 
Debtwire continues to stay ahead of the curve in Avaya coverage, exclusively reporting that the first liens plan to step up pressure to turn off advisory fees to crossholders. The argument is a precursor to an upcoming deficiency claim battle. Hours after the story hit, objections were filed in kind.

In a deep dive run through the iHeart complex, Debtwire last week reported that legacy noteholders are raising litigation options as recovery threats increase during ongoing exchange transaction delays.

Signs of weakness
 
Debtwire has been shining a light on a host of stressed credits where more dire financial straits could be in store.
 
Windstream, for one, may suffer negative after-effects from management’s previous financial engineering maneuvers.
 
TEAM Inc could get a bump from Harvey-related maintenance, but refinery closures threaten to disrupt 2017 earnings.
 
Debtwire last week had the scoop on Del Monte Foods 1Q18 volume and pricing power falling off and as a maturity wall looms.

Transocean’s Songa deal bought the company added runway, but the capital structure is under increased pressure amidst oil price depression.

Donald Trump’s legislative ineffectiveness and the recent withdrawal of regulatory favors for other industries has some investors are wary that payday lending sector optimism got ahead of itself.
 
Academy Sports loans sank as the market braced for Harvey fallout and the Houston-based retailer delayed the release of 2Q17 earnings.  But trading retraced losses after the CFO resigned and the company reported an EBITDA increase

The Millennium Labs TL dipped further into distressed territory as testing volumes have trickled away.
 
Deal action

Debtwire's scoop game in the origination world has been in high gear of late, kicking up exclusives on upcoming financings and m&a machinations.
 
Preliminary work on a Trimark USA buyout financing deal is being assembled with pro forma leverage topping 6x. 

The Evans Analytical Group (EAG Laboratories) auction process has attracted bids from several private equity firms willing to value their respective bids along double-digit EBITDA multiples.
 
Barnes & Noble has been sounding out private equity interest amid activist pressure.
 
Formerly bankrupt Atlas Resources, now known as Titan Energy, has engaged an advisor to sell its coalbed methane (CBM) assets.
 
MW Industries, an Illinois-based manufacturer of springs and specialty fasteners, is in the process of finalizing a sale to a private equity firm.
 
Educational assessment services provider Prometric has hired a bank to explore sale options.
 
Leonard Green is still in the running for car repair firm Dent Wizard, but Bain Capital has pulled out.
 
Performance
 
The final throes of 2Q17 earnings season are upon us, and Debtwire’s been racking up the exclusives on privately-held borrowers.
 
Blackhawk Mining’s liquidity is under pressure following a 2Q EBITDA miss.
 
Jo-Ann’s EBITDA dipped in 2Q as the company executes several category resets.

Pomeroy earnings stabilized in 2Q17, and funds have gone restricted to weigh CompuCom financing.

NuvoTV reported 2Q17 EBITDA growth as a 2019 maturity wall closes in.
 
Finally, LBI Media paid off TL debt, and reported mixed 2Q17 earnings.