Takeaway Tuesday #8

 An incredible chart from JPM below...

The news that banks will hold Twitter debt and sell at a later date and private equity firms doing equity only deals are emblematic of the times. And as expected more creditor on creditor violence and aggressive capital structure management is happening as we speak. I would guess we are just in the first innings of that.

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  • The Crypto Story: Matt Levine comes out with a MONSTER piece (I'm only 1/2 done) on everything (and I mean everything) crypto. For people ultra familiar with the space I think you'll learn something new from all the anecdotes and missives
  • The $30 Million Lottery Scam: I think one thing people are underappreciating is how long it takes the excesses to unwind in the market. Yes the UK pension scheme sorta blew up and Madoff was uncovered months after Lehman filed - that said I think you are going to see many many more shoes to drop over the next two years
Something I Bet You Didn't Know You Could Do On Reorg

Lets say you are a lender to a company going through some challenges. And we know a lot of companies are going through challenges. There could be ideas on amendments floating around or an uptier exchange or covenant breaches etc. If lenders wanted to organize they may call a desk or speak to lawyers to see who else is involved. Well all that data is on Reorg. Lets use a topical one: Mitel:

We've recently rolled out some data initiatives to better display and link the data across Reorg's databases. You'll see more of this data in Reorg stories soon. To access the database you can go here: Reorg CLO Database



Takeaway Tuesday #7

A couple weeks I noted how bad sentiment was...this was posted by @jasongoepfert "Last week, retail traders bought $19.9 billion worth of puts to open. They bought only $6.5 billion in calls to open. This is the first time in history that puts were 3x calls."

My prediction: We are going to have a bad recession, and the market will start discounting that 6-9 months in advance just like every time in the future. Multiples still generally high, rates are going higher (market has never bottom when rates were rising), and the credit market is awful. Reorg usage is up dramatically versus last year and everyone is gearing up for a big restructuring cycle in 2023. No one can catch the bottom though...

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Something I Bet You Didn't Know You Could Do On Reorg

Our Docket / PACER technology is still one of the most used features on the site with thousands of users getting alerted to docket updates in real time. We applied a data science model to our millions of dockets to parse them down into what the actual dockets point to. So for instance if you were looking for backstop motions you can do that:

What's great is that you can then filter by Judge, districts, industry, time, law firm etc. Its incredible. And lots of associates are using it to help with docket research, writing motions, getting comps etc.



Takeaway Tuesday #6

After last week's post and just limping in to what felt awfully bad Sunday night futures (Emergency Fed Meeting, rumors on CS, etc) the relief rally came right in the nick of time. Does anyone else feel like we are in the beginning of the beginning though? 

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

We spent the last 18 months building the most comprehensive data lake for all things credit and restructuring related. Its the best thing we ever built.

Here is more information and awesome video: https://www.reorg.com/products/credit-cloud/

Want to know every time Kirkland and Evercore worked together and what DIP looked in terms of fees or carveouts or budget like or the KEIPs that got denied in Delaware or the companies whose loans dropped the most in the past month with the least amount of liquidity that is also more than 7x levered. Want to see dashboards that show what your competitors are advising or investing in or maybe the fees law firms are charging for pre-packs...its all there

Effectively what we are trying to build: If you can ask the question in credit, Credit Cloud can provide the answer.

Give it a try or reach out to me and I'll set you up with the right person.



hunter [at] distressed-debt-investing [dot] com

About Me

I have spent the majority of my career as a value investor. For the past 8 years, I have worked on the buy side as a distressed debt and high yield investor.