Recently finance partners Paul Mullen, Jo Robinson, and Tom Astle sat down with Joelle Jefferis, Debtwire to discuss what has happened so far in distressed direct lending scenarios and what can be expected in the future. The short podcast covers areas such as how many unitranches have already been at restructuring stage, to how distressed
First published in LexisPSL Banking and Finance Mini-Mag: Autumn 2018 as distributed at the Loan Market Association Conference 2018
Many investors have voiced concerns in recent months that loan documentation terms havebecome so flexible in favour of sponsor-backed borrowers that they may lack key lender protections.
Faced with such terms, lenders’ focus has centered on the following fundamental principles: how much secured debt can be added to this deal going forward? How can I get to the table should things go wrong? Can I trade out if I need to?
In that context, we summarise below some of the hot topics in today’s market.
Astaldi, the Italian multinational construction company, filed on Friday (28 September) for concordato in bianco. This is an in-court restructuring proceeding under the Italian Bankruptcy Law, which imposes a standstill period for up to six months. Astaldi’s reference to certain provisions in the Bankruptcy Law indicates that it intends to use the standstill period to prepare for a concordato preventivo filing. Astaldi again delayed publication of its 30 June 2018 financial report, and said that it would voluntarily migrate from the “Star” segment of the Borsa Italiana to the general MTA segment. The full text of the announcement is available here.
Astaldi’s €620m RCF matures in 2019, and its €750m bonds mature in 2020. Astaldi had previously announced a €300m capital raise plan, conditioned on the sale of its stake in the Third Bosphorus Bridge. This plan stalled after the sale was delayed amidst the recent economic uncertainty in Turkey. Astaldi announced that its new preliminary restructuring proposal contemplates a lease of its business units to two new Astaldi SPVs, new super senior funding and a capital raise.
In this report, we will discuss:
- Key takeaways for bondholders;
- Concordato in bianco; and
- Concordato preventivo.
Unitranche facilities have been a feature of the European and US markets for a number of years, and have recently been making their mark in Australia.
What is unitranche? A unitranche facility is a single facility which replaces the need for separate senior and mezzanine facilities and carries a blended margin. It tends to be provided by a single lender on a take-and-hold basis.
Where has it come from? Unitranche began life around 2005 in the US mid-market, and spread into Europe in the wake of the global financial crisis in 2008. European banks were forced to de-lever their balance sheets post-2008, and also saw themselves subjected to more stringent capital adequacy requirements under Basel III. Non-bank lenders, the main providers of unitranche, are outside the reach of Basel III and, having initially taken the opportunity to fill that funding gap, have since seized a large share of the European mid-market.
In this article, we provide a brief introduction to unitranche, focus on the intercreditor issues which can arise when it is combined with a revolving credit facility, and look at how unitranche is evolving in Europe and may one day develop in Australia.
Chris Donoho, head of the U.S. Business Restructuring and Insolvency (BRI) practice for Hogan Lovells, shares his insights and perspective on global and U.S. restructuring trends.
|What if anything is different?|
|This article by Joe Bannister previously appeared in Oil & Gas Financial Journal on 16 May 2016, click here to go the original article.|
|NO ONE with any interest in or knowledge of the oil and gas industry can deny that the present market conditions are anything other than|