Takeaway Tuesday #4

Don't look now - the 1 year T Bill is at 4% and banks are about to take a bath on everything from syndicated loans (Citrix...) to commercial real estate...everything is great out there...

Reorg Content (subscription required)

• Performing / High Yield Credit - Petco / Lenders Object to Petco’s Effort to Transition Senior Secured Term Loan to SOFR From LIBOR Without Credit Spread Adjustment - given the underlying issues with the loan market its good to see the buyside work together to keep overall total return high for their own investors. We noted "The loan’s margin is currently L+325 bps. A transition to SOFR from LIBOR without a credit spread adjustment would have, in effect, lowered the coupon on the loan, given that one-month and three-month LIBOR indexes are currently 2.68% and 3.17%, respectively, while one-month SOFR is currently 2.28% and three-month is 1.92%."

• Distressed Credit - U.S. Renal Care / Pimco, Other U.S. Renal Care Lenders Working With Milbank, Houlihan Lokey - We noted "Market participants are evaluating the possibility of certain lenders to the dialysis provider proposing and executing a transaction that involves funding new money to extend the company’s maturity runway while rolling up their debt holdings that would prime other lenders, known in recent years as creditor-on-creditor violence, the sources said." This is something I think we are going to see a continued massive increase over this cycle

Two Pieces of Content I Found Interesting

• The Great Buenos Aires Bank Heist - This is a WILD story. The article came out pre pandemic (so about 20 years ago) and is just a super fun / crazy read 

• AI Art: World’s First Bot-Generated Graphic Novel Hits the Market - My kids and I have spent far too much time on Midjourney. We are in the 1st inning of the application of AI Art and its absolutely incredible the progress in just a couple years

Something I bet you didn't know you could do on Reorg.com

At Reorg, we very much built our business around distressed debt and bankruptcies in the early years. While we have continued to invest and deepen our expertise there, I believe we currently have the best covenant product combining deep editorial research and data in both the U.S. and Europe.

And I bet you didn't know we analyze every single primary issuance (bonds and loans) in a fashion that blows away the competition. We do this in the pre-marketing / pre-syndication phase as well. 

If you are looking for an analysis of a new loan in particular, you can reach out to our Covenants team at this email: CovenantLoanReport [at] reorg-research.com and request a review. We push these to the platform for topical credits to make people more aware of the service