Lodgenet, School Specialty, and PowerWave filing for bankruptcy
Big day / weekend for distressed debt investors with three relatively decent size filings in Lodgenet, School Specialty, and PowerWave. Still seeing runs kinda all over the place given the lack of liquidity in some of the names. I'll be back with more on each of these throughout the next two days.
3 comments:
Some good commentary here --
http://quinzedix.blogspot.com/2013/01/school-specialty-375-convertible.html
any thoughts on LNET? generating operating profitss, though it is a melting ice cube.
I'm calling the top of the HY market. NXP just priced an 8-yr fixed rate note at 5.75%.
Anyone buying this stuff needs their head examined.
2013E Adjusted EBITDA of $1,300m but will generate only $400m FCF given maintenance capex + restructuring outflows + interest expense + working capital builds.
This security is structurally subordinate to $3.5bn of secured (including a fully drawn revolver).
As a reminder to anyone running an insurance company (or fixed income fund, CLO, etc.) and younger than 3 years old -- EBITDA fell from
$1,000m to $(200)m in one year following a semi cycle top.
So you have the privilege of getting screwed 2 different ways: if we get deflation, enjoy watching your recovery at 0. If (when) rates start to rise, enjoy watching mark-to-market losses on your fixed rate paper.
Yield hogging at it's finest.
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